February 14, 2017 / 1:30 PM / a year ago

8:30 EMBARGO Canadian home prices rise in January, driven by Toronto -Teranet

OTTAWA, Feb 14 (Reuters) - Canadian home prices rose in January as home values in the hot Toronto market climbed even further, while those in Vancouver picked up after three months of declines, the Teranet-National Bank Composite House Price Index showed on Tuesday.

The index, which measures price changes for repeat sales of single-family homes, showed prices rose 0.5 percent last month and 13.0 percent from a year ago.

It was the 12th consecutive month that national home prices have risen and the largest annual increase since January 2007.

The monthly gain was driven by an 0.8 percent increase in Toronto and a 1.1 percent rise in nearby Hamilton, where prices have climbed as homebuyers have been shut out of the expensive Toronto market.

Toronto and Hamilton both racked up record annual increases of 20.9 percent and 17.6 percent, respectively.

Canada’s housing market has been robust in the years since the global financial crisis, boosted by low borrowing rates. The government tightened mortgage lending rules late last year to rein in consumer borrowing, a move that is expected to cool housing activity this year.

But recent data has suggested the housing market was off to a strong start in 2017. Indeed, the rise in the Teranet index signaled that prices have doubled since June 2005.

Prices in Vancouver rose 0.3 percent on the month, suggesting the once-hot market could be perking back up. The provincial government implemented a tax on foreign home buyers in the city last year in an attempt to address affordability issues, which took some of the steam out of the market. (Reporting by Leah Schnurr; Editing by Jonathan Oatis)

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