TORONTO (Reuters) - Canadian home prices fell in December from November and year-over-year price gains were the lowest in three years as Canada’s housing market continued to cool, 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 0.4 percent in December from a month earlier, the fourth straight monthly decline, a first outside of a recession, and the fourth December monthly decline in 13 years of data.
The index was up 3.1 percent from a year earlier, the 13th consecutive month of deceleration in 12-month inflation and the lowest rate in three years.
The report adds to recent evidence that Canadian housing market activity has been slowing steadily since the middle of 2012. Economists are now debating whether the market will crash or manage a soft landing.
Canada’s housing market avoided a meltdown in the wake of the financial crisis in 2009, helped by the country’s conservative lending standards. Ultra-low interest rates then helped fuel a post-crisis boom.
Canadian housing is now swooning just as the U.S. market is showing some signs of a long-awaited recovery.
Canada’s Conservative government last year tightened mortgage lending rules to make it harder for home buyers to take on too much debt in a bid to slow the nation’s red-hot housing market. The changes, which took effect in July, were the fourth such move in four years.
The report showed prices dropped in December from November in eight of the 11 metropolitan markets surveyed, led by a 1.0 percent drop in Vancouver, a 0.9 percent decline in Calgary and a 0.7 percent decrease in Halifax and Winnipeg. Prices slid 0.3 percent in Toronto and Montreal and 0.1 percent in Edmonton and Ottawa.
Three cities saw price gains in the month. Prices rose 1.7 percent in Quebec City and 0.9 percent in Victoria and Hamilton.
Year-on-year prices dropped 2.0 percent in Vancouver, which had the hottest housing market prior to the slowdown. Prices in Victoria were flat compared to a year earlier.
All of the other markets surveyed showed prices were still higher than a year ago.
Compared with December 2011, prices were 7.4 percent higher in Hamilton, 6.3 percent higher in Toronto, 5.6 percent higher in Halifax, 4.2 percent higher in Quebec, 4.1 percent higher in Calgary, up 3.9 percent in Winnipeg, up 3.0 percent in Montreal, 2.6 percent higher in Ottawa, 1.5 percent higher in Edmonton.
Reporting by Andrea Hopkins; Editing by Jeffrey Hodgson and Maureen Bavdek