Report shows gain of 11.6% in six cities

Canwest News Service

The latest home-price index from National Bank of Canada, done in partnership with real-estate technical-services provider Teranet, shows prices far ahead of where they were a year earlier, though monthly gains are slowing.

The Teranet-National Bank home-price index showed home prices among six major markets up 11.6% overall in March from a year before, up from annual gains of 9.9% in February and 7.5%in January.

The report said the widening year-to-year gap was largely due to the decline in home prices in the early part of 2009, an effect that carried through to April.

On a monthly basis, prices were up 0.3% in March. In February, they were up 0.2%, and gains for these last two months for which data is available mark the slowest pace of price gains in almost a year.

“The … slowing of monthly gains is consistent with a general loosening of resale-market conditions across the country,” the report said. “For some months now, homes have been coming on the market faster than they have been selling.”

The year-to-year gains have been largely influenced by prices in Toronto and Vancouver, which were up 15.5% and 14.4% respectively, from a year earlier in March. Other markets, which include Calgary, Halifax, Montreal and Ottawa, saw gains of less than 8%.

Calgary had the lowest year-to-year gain at 2.7%. It was also the only one with a monthly decline, with prices down 0.3%. It was the city’s third straight month of lower prices.

The Teranet-National Bank index is based on prices for homes that have sold at least twice. The survey does not provide specific sales figures.

The Canadian Real Estate Association also issued a report, saying that while prices are slowing, no one should expect a downturn like that seen in the United States.

CREA acknowledged that rising Canadian home prices in recent history have outpaced the growth of incomes, and some “stabilization” in the real estate market is due to allow incomes to catch up.

“This ratio [of incomes to home values] will revert to its long-term average as it always does as part of a normal housing-market cycle,” said Gregory Klump, CREA chief economist. “History suggests, however, that it will not do so by means of a significant correction in home prices.”

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