TORONTO (Reuters) - Canadian resale home prices were flat in March from February and 12-month home price inflation slowed slightly, the Teranet-National Bank Composite House Price Index showed on Monday.
While national prices were essentially unchanged last month from February, the index, which measures price changes for repeat sales of single-family homes, showed regional disparities, as Calgary roared ahead but Montreal faltered. The Teranet report does not provide actual prices.
“Except for the recession year 2009, this is the first time in 15 years of index data collection that home prices for Canada as a whole have failed to advance in March,” Teranet said in the report.
From a year earlier, prices were up 4.6 percent, a slowing from February’s 5.0 percent price gain. It was the first time in nine months that 12-month inflation has slowed.
Canada’s housing market, which has boomed unsteadily for about five years, slowed at the end of 2013 and observers have been watching to see whether homebuyers will storm back in as the spring buying season begins.
“With the spring season underway, we are likely to observe a typical bounce in housing activity so prices will likely remain buoyed over the next few months,” Mazen Issa, senior Canada macro strategist at TD Securities, said in a research note.
“This will be short-lived, however, as the underlying fundamentals point to a soft landing in the housing market.”
Canada escaped the U.S. housing crash that accompanied the 2008-09 financial crisis, and home prices have risen sharply, if not steadily, in the past five years despite moves by the federal government to tighten mortgage lending rules.
While some economists have predicted the Canadian market will crash, most have said they expect sales and new construction to level off in 2014 and 2015 as mortgage rates rise, with prices continuing to tick slowly higher.
“We look for the rate of home price appreciation to remain steady this year before edging lower in 2015, when the Bank of Canada is expected to resume its tightening cycle,” Issa said.
The Teranet data showed that prices rose in March from the month before in six out of 11 cities, fell in three cities, and were flat in two.
From a month earlier, prices rose 1.4 percent in Calgary, 0.4 percent in Edmonton, 0.8 percent in Halifax, 0.6 percent in Vancouver and 0.2 percent in Winnipeg. Vancouver’s gain was the 11th straight monthly increase.
Prices were down 0.7 percent in Hamilton, 1.8 percent in Montreal and 0.6 percent in Ottawa. They were flat in Toronto and Quebec City.
Year-over-year price gains were seen in seven of the 11 cities surveyed.
Compared with a year earlier, prices were up 9.7 percent in Calgary, 4.7 percent in Edmonton, 5.2 percent in Hamilton, 5.8 percent in Toronto, 7.6 percent in Vancouver, 0.2 percent in Victoria and 3.4 percent in Winnipeg.
Prices compared with a year earlier were down 4.2 percent in Halifax, 0.7 percent in Montreal, 1.2 percent in Ottawa, and 2.4 percent in Quebec City.
Reporting by Andrea Hopkins, Editing by W Simon and Peter Galloway