Canada home prices rise again, household debt hits record
By Andrea Hopkins
OTTAWA (Reuters) - Canadian home prices rose in November from a month earlier as prices continued to soar in Toronto, the biggest market, helping to drive household debt to another record, separate reports showed on Wednesday.
Surging home prices and consumer debt have sparked fears the gains could end in a U.S.-style housing collapse, but there are signs of cooling real estate markets outside of Toronto as the government takes more steps to rein in borrowing.
Prices for existing homes rose 0.2 percent in November from a month earlier as seven of the 11 cities surveyed in the Teranet-National Bank Composite House Price Index saw increases, offsetting a second consecutive decline in Vancouver.
Years of low interest rates since the financial crisis, as well as rising home prices, have encouraged Canadians to take on more debt, but the government and regulators have tightened mortgage lending rules repeatedly in recent years in a bid to prevent risky lending.
The house price index, which encompasses repeat sales of single-family homes, showed prices rose 1.1 percent in Toronto and 1.4 percent in nearby Hamilton in November, while Vancouver prices fell 1.3 percent.
The Vancouver housing market was already cooling when the provincial government imposed a 15 percent tax on foreign buyers in August to counter a backlash against wealthy foreigners, mostly from mainland China, who were blamed for driving up prices.
Nationally, prices are up 11.9 percent from a year earlier, with Vancouver prices up 19.3 percent and Toronto up 18.5 percent.
A separate report by Statistics Canada showed household debt as a share of income hit another record in the third quarter as the pace of borrowing outstripped wage gains. Continued...