UPDATE 1-Canadian house prices fall 0.2 pct in February from Jan-Teranet

Wed Mar 20, 2013 10:23am EDT
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TORONTO, March 20 (Reuters) - Canadian home prices fell in February from January, the sixth straight monthly decline, and February's price gain versus a year earlier matched January's modest year-on-year rise, 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 0.2 percent in February from a month earlier.

The index was up 2.7 percent from a year earlier, matching January's smallest year-on-year gain since November 2009. The annual rate has been slowing for a year for more than a year.

The report added to evidence that Canadian housing market activity has been slowing since the middle of 2012. Economists are debating whether the market will crash or manage a soft landing.

Canada's housing market avoided a meltdown after the financial crisis in 2009, helped by conservative lending standards and ultra-low interest rates.

The softening in the Canadian housing market follows the Conservative government's move last year to tighten mortgage lending rules to slow the red-hot housing market.

The latest report showed prices dropped in February from January in seven of the 11 metropolitan markets surveyed, led by a 1.4 percent drop in Victoria and a 1.2 percent drop in Calgary. Prices dropped 0.8 percent in Ottawa, 0.4 percent in Edmonton and Montreal, and 0.3 percent in Hamilton and Toronto.

Prices were up 0.9 percent in Quebec City, 0.8 percent in Winnipeg, 0.7 percent in Vancouver and 0.1 percent in Halifax.

Year-on-year prices dropped in only one city -- Vancouver, where they were down 1.5 percent from February 2012. Vancouver had the hottest housing market going into the downturn.

Compared with February 2012, prices were 6.5 percent higher in Hamilton, 6.3 percent higher in Halifax, 5.3 percent higher in Quebec City, 4.9 percent higher in Toronto, 4.0 percent higher in Winnipeg, 3.6 percent higher in Calgary, 2.7 percent higher in Edmonton, 2.4 percent higher in Ottawa, 2.0 percent higher in Montreal and 0.7 percent higher in Victoria.