Canada: Housing prices climb as Toronto and Hamilton markets surge
April 12, 2017
The Teranet-National Bank National Composite House Price Index recorded a monthly increase of 0.9% in March, a slight easing from February’s six-month high 1.0%. The index continued its streak of record-breaking highs—March’s reading of 204.1 was the highest on record.
With regard to regional developments, the Toronto housing market, which accounts for more than a third of the 11-city composite index, recorded a 1.8% month-on-month increase and was led only by Hamilton (+2.1% mom) in gains. Meanwhile, the Vancouver market, which accounts for a fifth of the index, posted a 0.9% increase over the previous month, though prices still remained below their September 2016 high. Across the eight other major housing markets, only Victoria, Winnipeg and Montreal recorded monthly increases, whereas the remaining markets experienced moderate declines.
On an annual basis, national housing prices rose at an over ten-year high of 13.5% in March, which was up from February’s 13.4%. Given the clear disparities across housing markets nationwide, the report did little to quell fears of a worsening Toronto housing market bubble. In April, the Ontario government followed British Columbia in announcing a foreign homebuyer tax to cool the Toronto housing market, though its effectiveness remains to be seen given that foreign investment in Ontario’s capital is considered less of a factor than in Vancouver.
Author: Christopher Thomas, Economist