Canada: House prices grow at a tepid pace in April as sales weaken
House prices inched up in April, with the Teranet-National Bank National Composite House Price Index rising 0.2% from a month earlier, following a flat print in March. New mortgage lending rules and higher borrowing costs continued to contribute to weaker sales and a cooler housing market.
Prices rose on a month-on-month basis in eight of the eleven cities in the composite index. Two cities recorded lower prices, and prices in one city were flat. In Toronto, which accounts for more than a third of the 11-city composite index, prices edged up 0.2% from a month earlier, pointing to a nascent stabilization of the city’s housing market following the introduction of new lending rules at the outset of the year. In Vancouver, prices rose 0.3% month-on-month to hit a fresh record high.
In annual terms, growth in house prices moderated for the tenth consecutive month in April, decelerating one full percentage point to 5.6%, the weakest figure in over two and a half years. Although housing fundamentals still appear solid, slower activity across the housing market—including the dip in housing starts as well as softer sales data in April—is expected to drag on residential investment in the first half of the year and weigh on full-year economic growth prospects.