Home prices rise on gains in Vancouver, Victoria

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Canada's housing market saw prices rise on a national basis in January, but the growth was almost entirely due to strength in Vancouver and Victoria.

The Teranet-National Bank National Composite House Price Index, which measures sale prices in 11 major markets, rose 0.3 per cent in January over December.

Teranet said the price bounce was not widespread, however, with only four markets climbing in January. Prices were buoyed largely by a 1.2-per-cent increase in the Vancouver region -- which came on the heels of a 1.3-per-cent increase in December – and a 1-per-cent price increase in Victoria.

National Bank economist Marc Pinsonneault said Vancouver drove the national index increase in January, with the region's condo market up 23 per cent compared to January last year, while the index for all other types of homes rose 13.5 per cent over the past year.

"Without Vancouver, the composite index would have retreated for a fifth month in a row," Mr. Pinsonneault said in a research note.

Prices rose a marginal 0.2 per cent in the Toronto region in January over December, which was the first increase in the index in six months.

The index is a rolling three-month average to smooth out monthly fluctuations. On an unsmoothed basis, the Toronto region has now seen three months of price increases, Teranet said.

Mr. Pinsonneault said some of the recent growth in Toronto may have come from a rush to purchase before tough new mortgage qualification stress test rules took effect Jan. 1.

He said there are also still mortgage rate increases to come this year, so "it is premature to conclude that home prices have definitely turned the corner in Toronto."

The Teranet index edged up 0.1 per cent in Montreal in January, while all other cities saw prices decline on a month-over-month basis. The biggest declines were see in Quebec City, which was down 2 per cent over December, and in Winnipeg, where the index fell 1.1 per cent over December.