OTTAWA (Reuters) - Canadian resale home prices continued to rise in October, data showed on Wednesday, but much of the increase was accounted for by a jump in the high-flying Vancouver market.
The Teranet-National Bank Composite House Price Index, which measures price changes for repeat sales of single-family homes, showed national home prices rose 0.2 percent last month. The data does not show actual prices.
Prices were up 5.4 percent from a year earlier, matching September’s year-on-year gain.
It was the 11th month in a row the index has risen, though prices rose in only five out of the 11 metropolitan markets surveyed. October’s gain also marked a slight slowdown from September’s 0.3 percent monthly increase.
Without a 1.2 percent rise in prices in Vancouver, the index would have been flat compared to September, the report said. Prices in Calgary climbed 0.5 percent, while in Toronto, they fell 0.2 percent.
The strong housing market that emerged in Canada in the wake of the global financial crisis has raised concerns that home prices could be due for a pullback when mortgage rates eventually start to rise.
But with the Bank of Canada likely to hold interest rates at current low levels well into next year, analysts expect prices will stay firm for now.
While the increase in resale prices was in contrast to figures earlier this week that showed cooling housing starts for October, the backdrop for the housing market remains robust, David Tulk, chief Canada macro strategist at TD Securities in Toronto, wrote in a note.
“The wider fundamentals - low interest rates and a respectable pace of hiring - speak to future momentum in the months ahead,” Tulk said.
Reporting by Leah Schnurr Editing by W Simon and Peter Galloway