OTTAWA (Reuters) - Canadian new home prices rose in February, driven by higher costs in Toronto and other cities in Ontario, Statistics Canada said on Thursday in a report that was likely to underscore concerns that some markets are becoming too hot.
The 0.4 percent increase topped economists’ forecast for a gain of 0.2 percent. Compared to a year ago, prices were up 3.3 percent, the fastest pace of growth since June 2010. The home price index excludes apartments and condominiums.
Toronto was the top contributor, up 1.0 percent on the month as builders cited a shortage of land and improving market conditions. On the year, home prices in Toronto climbed 8.6 percent, the biggest increase since January 1990.
The price acceleration in Toronto has prompted some economists to say the city’s real estate market is in a bubble. The Bank of Canada said on Wednesday that there are speculative forces at work in Toronto.
The price gains in Toronto have also spilled over to other nearby cities, with Oshawa up 1.2 percent on the month, while Hamilton gained 1.0 percent, the largest gain since July 2009. Prices increased in all 10 areas surveyed in the province of Ontario.
Reporting by Leah Schnurr; Editing by Chizu Nomiyama