August 14, 2017 / 12:33 PM / 4 months ago

Canadian home prices rise in July, Toronto shows signs of weakness

OTTAWA (Reuters) - Canadian home prices rose two percent in July from the month before as prices in Toronto continued to climb, though there were signs parts of the city’s market were starting to cool, data showed on Monday.

Houses under construction are seen at a subdivision near the town of Kleinburg, Ontario, Canada May 13, 2017. REUTERS/Chris Helgren

The Teranet-National Bank Composite House Price Index, which measures changes for repeat sales of single-family homes, also showed prices were up 14.2 percent from a year ago.

Toronto helped drive the national monthly increase with prices up 2.1 percent. Still, the report noted there were signs of weakness creeping into the market, with prices for dwellings other than condos down 1.6 percent on a non-smoothed basis.

This abrupt reversal was consistent with the recent decline in home sales in Toronto, the report said. Sales in Canada’s largest city have fallen since the provincial government imposed a number of measures to rein in the market, including a foreign buyers tax.

In Vancouver, where the British Columbia government imposed its own foreign buyers tax last August, prices were up 2.8 percent, marking a fresh peak.

Activity cooled in the country’s most expensive housing market after the tax was put in place, but prices have since recovered.

Teranet takes a three-month rolling average of prices to produce its index in order to even out month-to-month fluctuations.

Reporting by Leah Schnurr; Editing by Andrew Hay

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