Houses are seen in a suburb located north of Toronto in Vaughan, Canada, in this June 29, 2015, file photo. Toronto region leads in month-over-month increases, followed by Victoria, Hamilton and Vancouver.MARK BLINCH/Reuters
Canada's home prices rose 1.5 per cent in August, marking the third-largest gain for that month since the Teranet composite index launched in 1999.
Toronto led the way in month-over-month increases, according to new data from the Teranet-National Bank House Price Index.
Prices rose in seven of the 11 metropolitan markets surveyed in August, when compared with July. The index showed monthly increases of 2.8 per cent in the Toronto region, 2.2 per cent in Victoria, 2 per cent in Hamilton and 1.7 per cent in the Vancouver area. Ottawa, Halifax and Edmonton also posted gains, while Winnipeg, Calgary, Montreal and Quebec City had declines.
The composite index had a year-over-year increase of 11.4 per cent to 196.24, meaning prices went up by 96.24 per cent since June, 2005. It is the sharpest 12-month climb since July, 2010. The average sales price of various housing types in the national survey was $613,186 last month.
Prices in the Toronto area have surged 14.6 per cent over the past year, with the index hitting a record of 204.83 last month. "Due to a combination of high sales and shrinking supply, market conditions are the tightest in Toronto since at least 14 years, with the number of dwellings listed for sale representing only 1.1 month of sales," National Bank senior economist Marc Pinsonneault said in a research note on Wednesday.
The Vancouver region's house price index reached a country-leading 249.09 in August, up 25.8 per cent from the same month in 2015.
The latest increase is the 20th consecutive month that the house price index has climbed month over month in Vancouver. "For the first time in seven months, the monthly price increase in Vancouver was below 2 per cent. Market conditions, although still tight, have eased," Mr. Pinsonneault said. "That sets the stage for a moderate price correction in Vancouver."
Average prices fell from July to August in Greater Vancouver and the B.C. Fraser Valley as fewer luxury homes traded hands. But the real estate industry's benchmark prices, which represent the sale of typical properties, remain strong.
"There has always been a considerable lag between shifts in home sales and prices. The fall in Vancouver-area home sales this year will trigger a slowdown in the rate of house price growth to single digits by early next year," economist Paul Ashworth of Capital Economics Ltd. said in a note.
In an interview, he predicted benchmark prices and the Teranet-National Bank index could have outright year-over-year declines in the Vancouver region by mid-2017.
Calgary's housing market showed a monthly loss of 0.2 per cent in August. That August decrease to 178.33 marks the third consecutive month of drops in the index. Over the past year, the index has decreased 4.5 per cent.
Edmonton's housing market eked out a monthly gain of 0.4 per cent last month. Edmonton's house price index, which has dropped 0.3 per cent over the past year to 181.40, peaked in September, 2007.
Montreal home prices experienced a 0.8-per-cent deterioration in August, down from a peak in July. The previous high was in July, 2014.
Year-over-year in the house price index, the market had a 0.6 per cent increase. Montreal's house price index hit 153.19 last month.
The Ottawa-Gatineau market's index rose 0.8 per cent in August, extending a streak of gains to five months. On a year-over-year basis, the house price index in the Ottawa area was up 1 per cent, exceeding the previous high from August, 2014.
Ottawa's index registered 146.07 last month, meaning prices have climbed 46.07 per cent since June, 2005.
Brent Jang