Canadian home resale prices up for 5th month

Wed Nov 25, 2009 3:15pm EST
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By Ka Yan Ng

TORONTO (Reuters) - Canadian home resale prices rose for a fifth straight month in September, chalking up gains in five of six major markets, the latest sign of the housing sector's strength in an otherwise struggling economy.

The Teranet-National Bank Composite House Price Index released on Wednesday showed that prices were up 1.3 percent nationally in September from August.

It was the smallest rise in four months for the index, which measures price changes for repeat sales of single-family homes without giving actual dollar figures. But it highlighted how record low interest rates continue to boost housing demand.

"On balance, there was broad-based strength in this report, which is consistent with other measures of the Canadian housing market," said Ian Pollick, TD Securities' economics strategist.

Teranet's year-over-year national measure showed prices were down 1.8 percent from September 2008.

Canada's housing sector escaped the massive crash seen in the United States and other Western countries, partly because its traditionally conservative banks avoided many of the lax lending practices that fueled a bubble in other markets.

While the market took a hit last year in the wake of the global financial crisis, it swiftly recovered. Recent figures showed sales of existing homes rose to a record monthly high in October.

The startlingly rapid rebound has raised concerns in some circles that real estate could become the next bubble. But analysts said Canada's central bank won't necessarily tighten monetary policy in response.   Continued...

<p>A sign indicating a house has been sold on the real estate market is seen in Toronto, April 9, 2009. REUTERS/Mark Blinch</p>