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Big-city sales bump house prices

Big-city sales bump house prices



Prices for new homes in Canada edged up in December, led by the Toronto and Montreal regions, Statistics Canada said Thursday.

Prices rose 0.1 per cent during the month, following a 0.3 per cent increase in November, the federal agency said. The December increase was slightly be-low economists' forecasts for a 0.2 per cent gain. On a year-over-year basis, prices were up 2.5 per cent.

"The metropolitan regions of Toronto and Oshawa, and Montreal were the top contributors to the increase in December," the agency said. "The positive impact of these metropolitan regions on the overall index was offset in part by decreases observed in Vancouver and in Hamilton."

Prices were unchanged in 12 of the 21 metropolitan regions tracked by Statistics Canada.

BMO Capital Markets economist Robert Kavcic said Canadian residential construction activity "continues to look steady overall, but there are some notable trends taking place below the surface - namely the robust pace of building in the Ontario condo sector to meet equally robust demand."

On Monday, the Canadian Real Estate Association released its home price index, which looks at just five markets comprising 50 per cent of the Canadian real estate market. That index showed January home prices up 5.2 per cent year-over-year, an indication that home prices are heating up again at least in those five markets: Calgary, the Fraser Valley in B.C., Vancouver, Montreal and Toronto.

"While home prices remain up compared to one year ago, price growth from one month to the next has been slowing, causing year-over-year gains to shrink, and prices are generally expected to continue to stabilize this year," said CREA president Gary Morse.

The current low interest-rate regime has been seen as a major factor in the continued heat in what TD Economics economist Dina Petramala has called Canada's "overbuilt and overpriced" housing market.