Canada New House Prices Climb 0.1% in August

Elias Hubbard
October 12, 2017

Royal Lepage's survey found the median price of a condominium rose by 17.6 per cent year-over-year to $622,392, while the cost of two storey detached home dropped by 1.1 per cent to $1,532,849 over the same period.

In addition to Toronto, the price index for Quebec City lost 2.3 per cent, while Hamilton slipped 1.9 per cent, Halifax dropped 0.4 per cent and Winnipeg lost 0.3 per cent.

David Madani, senior Canada economist at Capital Economics, said a sharper slowdown in price inflation in the coming months is unavoidable.

"Uneven regional economic growth has plagued Canada for much of the past decade, a challenge most evident in the nation's housing markets", Royal LePage President and CEO Phil Soper said in the report. "For now, the Toronto and Vancouver housing markets have returned to earth", he continued, noting rising interest rates and a strong loonie kept prices from appreciating rapidly.

Price increases of more than 30 per cent in Toronto early in the year sparked fears of a housing bubble, and the provincial government slapped a 15 per cent foreign buyers tax on purchases in the city to cool speculation. The cost of new fixed-rate mortgages has also climbed in recent months as yields on the bond market have risen.

The price index for Toronto was down month-over-month by 2.7 per cent.

It was the first monthly decline since January 2016 and the biggest since September 2010.

Compared with a year ago, the national composite house price index was up 11.4 per cent.

Two recent interest rate hikes by the Bank of Canada have helped rein in demand, and analysts are divided over whether the market will manage a soft landing or see a U.S. style housing crash.

"Toronto home prices are much lower than those we see in Vancouver, and the overall size of the market is considerably larger", he said.

Other reports by Click Lancashire

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