Seasonal boost pushes Canadian home prices up 0.8% in June

FILE PHOTO: A construction worker works on building a new townhouse in Calgary, Alberta, April 7, 2015. REUTERS/Todd Korol

OTTAWA (Reuters) - Canadian home prices rose 0.8% in June from the prior month, thanks to a seasonal boost, but the increase was lower than the 21-year average, data showed on Thursday.

The Teranet-National Bank Composite House Price Index measures changes for repeat sales of single-family homes. A 0.5% gain in May was the first since August 2018.

Both May and June’s gains were weaker than the 21-year averages. June’s 21-year average was 1.2%.

“The last two monthly readings cannot be taken as a sign of market vigor,” said Marc Pinsonneault, a senior economist at National Bank of Canada.

If seasonal pressures were removed, the composite index would have declined by 0.4% in May and 0.5% in June. The annual gain in June, at 0.5%, was the smallest seen since November 2009.

Price declines were seen in several Western Canadian markets.

Vancouver recorded its 11th straight month without a gain. In oil-rich Alberta, Calgary recorded its 11th month out of 12 without a rise while the province’s capital city, Edmonton, saw a flat month.

“These readings are consistent with signals from other indicators of soft resale markets in those metropolitan areas,” Pinsonneault said.

In Eastern Canada, Toronto, Hamilton and Ottawa recorded a third consecutive month of gains, while Montreal recorded a increase of 0.8% - the 13th index rise in 15 months.

Reporting by Kelsey Johnson; Editing by Cynthia Osterman