New House Prices in Canada Rose Less Than Expected

Canadian new home prices rose less than expected in August as prices were unchanged in a number of markets, including the cities of Toronto and Vancouver, which have been the country’s hottest regions, Statistics Canada said on Thursday.

The 0.1 percent increase in national prices from the previous month was shy of forecasts for a gain of 0.3 percent. The index excludes apartments and condominiums.

Prices were unchanged in 15 of the 27 markets surveyed, including Toronto, where prices were flat for the third month in a row.

Home sales and prices in Canada’s largest city have cooled from their April peak since the Ontario government imposed a number of measures to rein in the hot market, including a foreign buyers tax.

Prices were also unchanged in Vancouver after five consecutive months of increases, the statistics agency said. Vancouver has had its own foreign buyers tax since last August, which initially dampened activity, though prices have been heading higher again.

Canada has had a long housing boom, partly fueled by lower borrowing costs in the wake of the global financial crisis. Two interest rate hikes from the Bank of Canada this year are expected to weigh on the market.

via Reuters

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza