Canada: House prices record slowest growth since January in June; housing starts dip
According to the Teranet-National Bank Composite House Price Index, house prices rose 1.4% in June (May: +2.3%). June’s figure marked the worst reading since January. On an annual basis, house prices rose 16.7% in June, which was below May’s 18.3% expansion and was also the worst result since January. Data from the Canadian Real Estate Association (CREA) was even more pessimistic, pointing to month-on-month falls in home prices and sales in June. Higher interest rates and inflation, as well as affordability concerns, have weighed on house prices recently.
That said, housing starts are still healthy, clocking 273,841 units on a seasonally-adjusted annualized rate (SAAR) basis in June, down 3% from May’s reading but higher than the average reading for Q1. This bodes well for residential investment in the second quarter. However, housing starts are forecast to dip later this year, as the broader economy slows amid tighter financial conditions.