UPDATE 2-Canadian house prices edge higher in April

Tue May 14, 2013 10:51am EDT
 
Email This Article |
Share This Article
  • Facebook
  • LinkedIn
  • Twitter
| Print This Article
[-] Text [+]

* Prices up 0.2 pct in April from March, up 2.0 pct on year
    * Price gains smallest since 2009 recession
    * Economist says report consistent with stabilizing market


    By Andrea Hopkins
    TORONTO, May 14 (Reuters) - Canadian home prices rose in
April from March as three strong cities in Western Canada more
than offset weak showings elsewhere, while the annual gain in
prices slowed, the Teranet-National Bank Composite House Price
Index showed on Tuesday.
    The index, which measures price changes for repeat sales of
single-family homes, showed overall prices rose 0.2 percent in
April from a month earlier, but the weakest April gain in 15
years except for the 2009 recession.
    The index was up 2.0 percent from a year earlier, the
smallest 12-month gain since November 2009.
    The report suggested Canada's housing market has regained
some spring strength after a long, slow winter of declines
following the government's move to tighten mortgage lending
rules in July 2012, but remains subdued. 
    "We view this report as broadly consistent with
stabilization in the housing market over the near-term. Sales
activity has been better supported recently ... which in turn
should also help carve out a trough in national home prices," 
Mazen Issa, Canada Macro Strategist at TD Securities, said in a
research note.
    "Taken in context with the healthy correction in sales and
building activity, today's report further underscores the recent
constructive developments in household imbalances," Issa said.
    Canadian policymakers, including Bank of Canada Governor
Mark Carney and Finance Minister Jim Flaherty have repeatedly
warned consumers about taking on too much household debt to get
into the housing market, and have been trying to engineer a soft
landing for the sector by tightening bank lending rules.
    Residential real estate activity typically picks up in the
spring, and economists have been waiting to see if demand will
return after a dramatic slowdown since the middle of 2012. 
    The Teranet-National Bank report showed prices rose more
than 1 percent in April from March in three markets in Western
Canada, where booming natural resource sectors have boosted
economic activity. 
    Prices were up by 1.3 percent in Winnipeg and Edmonton and
by 1.2 percent in Calgary. Excluding the three regions, the
composite index would have been flat in April.
    Smaller increases included a 0.6 percent rise in Hamilton, a
0.5 percent gain in Montreal and a 0.4 percent advance in
Toronto.
    Prices were down from the month before in five markets.
Vancouver prices dropped 0.8 percent, Quebec City prices dipped
0.5 percent, Ottawa-Gatineau prices were off 0.2 percent, and
prices fell 0.1 percent in Victoria and Halifax.
    Year-on-year price gains continued to slow but remain
positive in 9 of 11 Canadian cities as slowing sales activity
has yet to bring down prices. 
    Prices dropped from April 2012 by 3.3 percent in Victoria
and by 2.9 percent in Vancouver, which were among the hottest
Canadian markets prior to the slowdown. 
    Compared with a year earlier, prices were up 6.1 percent in
Quebec City, 5.5 percent in Calgary, 5.4 percent in Hamilton,
4.4 percent in Winnipeg, 4.3 percent in Toronto, 3.6 percent in
Edmonton, 2.8 percent in Halifax, 1.5 percent in Ottawa and 1.3
percent in Montreal.
    The industry group for Canadian real estate agents is set to
release its April report on sales of existing homes on
Wednesday, which is expected to show a sharp drop in activity
from a year earlier even as prices held steady.