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August 5, 2010
Canadian home prices rose 1.3% in May, their largest monthly gain since last September, but are unlikely to keep up the pace in months ahead, according to the Teranet-National Bank composite house price index, released Wednesday.
On an annual basis, prices rose 13.6% and are now 4.2% higher than their pre-recession peak.
Prices have now advanced for 13 straight months, the survey showed.
The yearly gains were strongly influenced by advances in Canada’s major markets, with Vancouver up 17.1% year over year and Toronto up 16%.
In the other four markets surveyed, year-over-year prices gained 7.8% in Calgary, 8.5% in Montreal, 11.4% in Ottawa, and 5.6% in Halifax.
Nevertheless, National Bank senior economist Marc Pinsonneaul said “we do not believe that acceleration . . . will be sustained.”
“The number of existing homes sold has declined in each of the three months ending last June, and it did so to a much larger extent than the number of new listings. This heralds a deceleration in home price inflation, especially since a harmonized sales tax was introduced on July 1 in Ontario and B.C.”
The Teranet survey differs from other national surveys, which have already shown price declines, by focusing solely on price variations in Canada’s six major urban markets and filtering out such factors as a shift in preference to larger homes that can skew average prices.
Financial Post
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