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Canada home prices see biggest decline in seven years as Toronto falls
October 12, 2017 / 12:30 PM / 7 days ago

Canada home prices see biggest decline in seven years as Toronto falls

OTTAWA, Oct 12 (Reuters) - Canadian home prices fell in September, making for the biggest decline in seven years as the city of Toronto was knocked lower by provincial government moves to cool the market, data showed on Thursday.

The Teranet-National Bank Composite House Price Index, which measures changes for repeat sales of single-family homes, showed prices were down 0.8 percent in September from the month before.

It was the first monthly decline since January 2016 and the biggest since September 2010. National price gains also slowed on an annual basis, with prices up 11.4 percent from last year, compared to an annual increase of 13.1 percent in August.

Toronto, Canada’s largest city, led the way down with a 2.7 percent monthly decline. In nearby Hamilton, where home values have climbed as buyers are priced out of Toronto, prices fell 1.9 percent.

Other data have shown Toronto home sales have dropped compared to where they were a year ago since the Ontario government introduced a number of measures in April, including a tax on foreign buyers, to tamp down the market in Toronto and the surrounding areas.

As well, the Bank of Canada has raised interest rates twice this year, which has made mortgage rates more expensive. The central bank has said it is closely watching how the economy and consumers react to higher borrowing costs.

In Vancouver, where British Columbia implemented its own foreign buyers tax last year, prices were up 1.3 percent, Teranet said.

While prices in Vancouver initially declined after the tax was put in place last August, prices have rebounded to a fresh peak.

Reporting by Leah Schnurr; Editing by Chris Reese

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