House prices dip 0.4 percent in September from August: Teranet

Wed Oct 24, 2012 11:40am EDT
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By Andrea Hopkins

TORONTO (Reuters) - Home prices dipped in September from August and year-over-year price gains slowed for a 10th straight month in another sign that Canada's housing market is cooling, 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 overall prices fell 0.4 percent in September from a month earlier, the third September drop over the past 13 years.

"The other two (September declines) were in 2008, as Canada was entering recession, and during the correction of 2010," Teranet noted in its report.

The index was up 3.6 percent from a year earlier, for a 10th consecutive month of deceleration in 12-month inflation.

"Today's print further underscores the moderation in Canada's housing market," Mazen Issa, Canada Macro Strategist at TD Securities, said in a research note.

The report is the latest in a string of data suggesting that an extended Canadian upswing in house sales and prices is coming to an end.

With cooling evident in Vancouver and several other major cities, speculation has turned to whether the slowdown will be a soft landing or a crash.

The long run-up in Canadian house prices and low supply in some markets had sparked concern a housing bubble was forming. The federal government has tightened mortgage lending rules four times in four years to try to prevent borrowers from taking on too much debt to buy into the market.   Continued...

A home is put up for sale in downtown Montreal, July 14, 2009. REUTERS/Shaun Best