Canada’s Home Prices Rise for 15th Month Straight on Hefty Gains in Toronto, Hamilton
Canadian home prices rose in April, data showed on Friday, lifted once again by hefty price gains in the hot Toronto market, which some fear is becoming overheated.
The Teranet-National Bank Composite House Price Index, which measures changes for repeat sales of single-family homes, showed prices rose 1.2 per cent last month, making for the fifteenth consecutive month national prices have increased.
In the Toronto market, which some economists have called a bubble, prices climbed 2.6 per cent, while nearby Hamilton was up 2.1 per cent. Indexes for both cities were at record highs.Compared to a year ago, prices were up 26.3 per cent in Toronto and 22.9 per cent in Hamilton, a record pace for both, the report said.
The rapid growth in Toronto home prices has spread to surrounding regions, including Hamilton, as potential buyers are priced out of Canada’s largest city. The provincial government announced measures at the end of last month to try to cool the Toronto market, including a tax on foreign buyers.
The report pointed to tight market conditions as demand exceeds the supply of homes for sale, a factor that has been partly blamed for rising prices.
In Vancouver, where the British Columbia government imposed its own foreign buyers tax last August, prices dipped 0.1 per cent on the month. Nonetheless, prices remained just 0.3 per cent away from the peak seen last year.
Elsewhere in the province, prices climbed 1.5 per cent in Victoria.
Canada’s housing market has been generally robust in the years since the global financial crisis, partly fuelled by low interest rates, but concern over consumer indebtedness and housing affordability has become more prominent recently.
Moody’s on Thursday downgraded the ratings of Canada’s major banks, citing rising household debt and the hot housing market.