July 12, 2018 / 1:04 PM / in a month

Canada new house prices flat in May for a third month

OTTAWA (Reuters) - Canadian new home prices were unchanged in May for a third straight month, with Toronto and Vancouver both flat as tighter mortgage rules and higher interest rates reduced demand, Statistics Canada said on Thursday.

FILE PHOTO: A construction worker works on a new house being built in a suburb located north of Toronto in Vaughan, Ontario, Canada, June 29, 2015. REUTERS/Mark Blinch/File Photo

Prices were unchanged or declined in 15 of the 27 metropolitan areas surveyed, while 12 markets reported gains, led by the Ontario cities of Guelph, London and Windsor, Statscan said in a report.

The flat prices in Toronto, the nation’s largest market, followed four months of declines, while overall growth in housing prices in Vancouver has stalled for five months, Statscan said.

Compared to a year ago, new house prices were up 0.9 percent in May, the smallest increase since February 2010. Ottawa had the biggest gain, up 5.2 percent, while Vancouver prices were 4.8 percent higher. Toronto prices were down 1.3 percent from May 2017.

Canada’s once-hot housing market has softened in the wake of four interest rate hikes by the Bank of Canada since July 2017, though the condo markets in both Toronto and Vancouver have remained robust and the central bank said on Wednesday housing markets may have begun to stabilize after a weak start to 2018.

The new housing price index excludes apartments and condominiums, which have seen robust sales in big cities and account for one-third of new housing.

Reporting by Andrea Hopkins and Dale Smith; Editing by Bernadette Baum

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