(Adds regional data, economist's comment, CMHC forecast)
By Andrea Hopkins
TORONTO Aug 13 Canadian resale home prices rose
in July and the pace of 12-month price appreciation accelerated,
the Teranet-National Bank Composite House Price Index showed on
Wednesday, adding to strong housing starts this summer to signal
a market that continues to be robust.
The index, which measures price changes for repeat sales of
single-family homes, showed national home prices rose 1.1
percent from June, exceeding the historical average for July.
Prices were up 4.9 percent from a year earlier, a pickup
from June's 4.4 percent price gain.
The price increases, on top of strong housing starts data
released earlier this week, have surprised economists who have
been calling for a slowdown in Canada's long housing boom.
Canada escaped the U.S. housing crash that accompanied the
2008-09 financial crisis, and home prices have risen sharply, if
not steadily, over the past five years despite moves by the
federal government to tighten mortgage lending rules.
A separate report on Wednesday from Canada Mortgage and
Housing Corp (CMHC), the federal housing agency, predicted a
gradual slowing for the market as buyers mop up excess supply
before builders start new projects.
"Recent trends have shown an increase in housing starts,
which is broadly supported by demographic fundamentals," CMHC
Chief Economist Bob Dugan said in the report. "However, our
latest forecast calls for starts to edge lower as builders are
expected to reduce inventories instead of focusing on new
The CMHC said housing starts will be in a range of 179,600
and 189,900 in 2014, with a point forecast, or most likely
outcome, of 184,800 units, down from 187,923 units in 2013. That
is up from CMHC's May estimate of 181,100 units.
The agency said there will be 163,000 to 203,200 units
started in 2015, with a point forecast of 183,100 units, also an
upwardly revised forecast.
The CMHC forecast for the average price calls for a 4.5
percent gain to C$399,800 ($366,084) in 2014 and a further 1.8
percent gain to C$406,800 in 2015.
The Teranet data showed prices rose in July from the month
before in 10 out of 11 cities, led by a 3.5 percent gain in
Victoria, a 2.0 percent gain in Ottawa and a 1.8 percent gain in
Prices were down 0.1 percent in Winnipeg.
Year-over-year price gains were seen in seven of the 11
Compared with a year earlier, prices were up 8.2 percent in
Calgary, 3.7 percent in Edmonton, 7.1 percent in Hamilton, 1.5
percent in Montreal, 6.6 percent in Toronto, 6.1 percent in
Vancouver and 2.5 percent in Victoria.
Prices compared with a year earlier were down 1.2 percent in
Halifax, 0.1 percent in Ottawa, 1.2 percent in Quebec City and
0.1 percent in Winnipeg.
(Editing by W Simon; and Peter Galloway)