The Canadian Housing Price Index shows that prices increased by 1.3% between the months of April and May. Furthermore, housing prices in Canada have shown straight gains for the past 6 months. The housing index is called the Teranet-National Bank Composite House Price Index and it measures the price changes for repeated sales of single-family homes in six Canadian metropolitan areas.
Vancouver and Toronto, Canada’s most expensive real estate markets were the price-gain leaders in May, up 1.6% and 1.7%. In May, prices also rose in Montreal by 0.7%. Moreover, in Toronto, home prices have reached their highest point since July of last year.
The rise in prices in Vancouver can be explained by buyers trying to get ahead of the new mortgage rules implemented last March. The lag between actual home sale and their entry into public land registries can explain the delay in price index gains which only became apparent in the months of April and May.
Marc Pinsonneault, senior economist at National Bank Financial believes that the spike in real-estate activity is currently behind us. He believed that home prices have reached their peak and will not be a lasting trend. The data collected by Canada Real Estate Association has already seen housing sales slow down nationally during the month of June.
Economists expect housing prices to cool down over the next two years due to stricter mortgage rules and the markets anticipation of higher interest rates.
For more information consult the Montreal Gazette website.