UPDATE 1-Canadian home prices edge higher in December -Teranet

Tue Jan 14, 2014 11:08am EST
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By Andrea Hopkins

TORONTO Jan 14 (Reuters) - Canadian home resale prices edged up in December and returned the Teranet-National Bank Composite House Price Index to a record high after a decline the month before.

The index, which measures price changes for repeat sales of single-family homes, showed on Tuesday that national prices rose 0.1 percent last month from November. In November, they fell 0.1 percent from October.

The housing market cooled in 2012 after Canada's government tightened mortgage rules due to worries that low interest rates were prompting Canadians to take on too much debt.

While the sector bounced back in 2013, some signs of a slowdown began to emerge in the final months of the year, with building permits and housing starts falling and prices leveling off amid speculation about rising mortgage rates and oversupply.

In December, resale prices were up 3.8 percent from a year earlier after November's 3.4 percent year-on-year gain. The Teranet index does not show actual prices.

For 2013 as a whole, the Teranet price index decelerated to a 2.6 percent average gain, down from a 4.8 percent rise in 2012 and a 5.0 percent surge in 2011, noted Mazen Issa, senior Canada macro strategist at TD Securities in Toronto.

"Despite the uptrend in home price appreciation in the latter half of the year, we expect home prices to decelerate in the year ahead, albeit modestly as monetary policy is expected to stay accommodative for an extensive period of time," Issa said.   Continued...