Canada: Housing prices cool in in July
August 14, 2017
In July, the Teranet-National Bank National Composite House Price Index recorded a monthly increase of 2.0%, a cooling compared to June’s record-breaking 2.6% rise.
The July hike in the Bank of Canada’s interest rate and sweeping measures by the government are likely helping cool rising property prices across Canada. Prices in Toronto, the market with the largest aggregate property value, grew at a month-on-month rate of 2.1% (June: +3.7% month-on-month). The slower rate of growth here partly stems from a drop in the number of luxury property sales. Prices increased 2.8%, which was above the country average, in both Victoria and Vancouver. The two markets that recorded the smallest increases were Calgary and Quebec City, with growth of 0.6% and 0.4%, respectively.
On an annual basis, national housing prices grew at 14.2%—the same rate as June’s all-time high. The rise was led by the Toronto and Hamilton markets, which grew by 28.0% and 25.2%, respectively. Meanwhile, the markets of Edmonton and Winnipeg lagged far behind, with the lowest annual growth rates of 0.5% and 0.1%, respectively.
In the 14 markets not included in the National Composite Index, 12 of which are in Ontario, index values in July were flat in the Sudbury market and increased modestly in the rest, ranging from 0.3% to 4.6% increases on a monthly basis. A new tax in Ontario on foreign home buyers, introduced to cool the double-digit gains in recent months, took effect on April 21 and may have had a taming effect on price growth in the province in July.
Author: Edward Gardner, Economist