By Andrea Hopkins
TORONTO, March 12 Canadian home prices rose in
February, pushing a national index of prices to a record high
for the second month in a row, the Teranet-National Bank
Composite House Price Index showed on Wednesday.
The index, which measures price changes for repeat sales of
single-family homes, showed national prices rose 0.3 percent
last month from January.
Prices were up 5.0 percent from a year ago, an acceleration
from January's 4.5 percent price gain.
"Another month, another surprise on the upside when it comes
to Canadian home prices. Price increases are still outpacing
income gains by a wide margin in many markets, a situation we
deem unsustainable in the longer run," TD Economics analyst
Sonny Scarfone wrote in a research note.
Canada's housing market has remained stubbornly robust in
recent years, notwithstanding a slowdown in 2012 when the
federal government tightened mortgage lending rules to prevent
home buyers from taking on too much debt to get into the market.
While some observers fear the booming housing market -
prices rise 26 percent in the last five years, according to the
Canadian Real Estate Association - could crash like the U.S.
market did in 2008-2009, most economists expect a gradual
cooling in demand and prices as mortgage rates rise.
TD's Scarfone said a low supply of new listings remains a
big driver of upward pressure on house prices, but rising
mortgage rates throughout 2014 should make housing less
The Teranet data showed that prices rose in February from
the month before in 6 out of 11 cities, mostly in Western
Canada, and fell in 5 cities, all of them in Ontario, Quebec and
the eastern part of the country.
From a month earlier, prices rose 1.1 percent in Calgary,
0.6 percent in Edmonton, 0.5 percent in Winnipeg, 0.7 percent in
Montreal, and 0.9 percent in Victoria and Vancouver. Vancouver's
gain was the 10th straight monthly increase.
Prices were down 1.7 percent in Halifax and Quebec City, 0.5
percent in Hamilton, 0.8 percent in Ottawa, and 0.1 percent in
Toronto. Toronto prices have risen only twice in the last six
months, the report noted.
Year-over-year price gains were seen in 7 of the 11 cities
surveyed, the first time since October 2009 that there was price
deflation in at least four of the regions covered.
Compared to a year earlier, prices were up 9.6 percent in
Calgary, 5.4 percent in Edmonton, 5.0 percent in Hamilton, 1.9
percent in Montreal, 6.1 percent in Toronto, 7.7 percent in
Vancouver and 3.5 percent in Winnipeg.
Prices compared to a year earlier were down 4.7 percent in
Halifax, 0.6 percent in Ottawa, 2.0 percent in Quebec City and
3.4 percent in Victoria.