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Montreal, Canadian home prices rise in April

Montreal, Canadian home prices rise in April

 

Canadian home prices climbed 5.2 per cent in April from a year earlier.
 

Canadian home prices climbed 5.2 per cent in April from a year earlier.

Photograph by: © Mike Cassese / Reuters , REUTERS

TORONTO – Canadian home prices climbed 5.2 per cent in April from a year earlier, boosted by strong gains in the Toronto market as well as increases in Vancouver and Calgary, the Canadian Real Estate Association said on Friday.

The rise in the industry group’s home price index for April compared with a 5.1-per-cent year-on-year gain in March.

Toronto once again posted the biggest increase, with prices jumping 7.9 per cent from a year earlier. Prices were up four per cent in Calgary, 3.7 per cent in Vancouver, and 2.3 per cent in Montreal.

The long upward march in home prices in Toronto has boosted speculation of a real estate bubble, but some economists have said the prospect of higher interest rates in the next year or two could prompt a modest correction.

“Canadian home price gains are generally expected to moderate, but there are a few hot spots where prices are being fuelled by some very strong housing market fundamentals,” Wayne Moen, CREA’s president, said in a statement.

“Toronto has less than two months of supply compared with six months nationally, so it ranks among the tightest of Canadian housing markets,” he said.

CREA’s index, which monitors housing prices in five major urban markets, does not show actual prices.

Single-family home prices drove April’s overall gains, rising 6.4 per cent from a year earlier, while apartment unit prices were up 3.6 per cent and townhouse prices climbed 2.7 per cent.

Canada’s housing sector did not experience the subprime mortgage boom and bust that drove the United States into recession. Since the recession, the market has rallied on record low borrowing costs.

Bank of Canada governor Mark Carney and Finance Minister Jim Flaherty have expressed concern about the housing boom, with Flaherty tightening mortgage rules several times to try to cool the market.