A soft landing for the Canadian housing market appears to be the most likely scenario, as the latest numbers from the country’s largest real estate association show a continued deceleration of home prices.
The Canadian Real Estate Association said its MLS Home Price Index (HPI), a survey of five major housing markets showed prices continued to rise in February.
However, the 5.1 per cent year-over-year increase in February was the smallest since June 2011. It was also the fourth consecutive month in which gains slowed.
Toronto posted the biggest gain, rising 7.3 per cent, while prices also moderated in Calgary (2.5 per cent) and Montreal (1.6 per cent).
The aggregate composite HPI rose 1.1 per cent on a month-over-month basis in February, with prices for two-storey single family homes up 1.6 per cent. Prices for townhouse/row and apartment units saw smaller gains of 0.4 and 0.5 per cent respectively.
“The index typically rises in February from the previous month as demand ramps up leading into the spring housing market,” said Gregory Klump, CREA’s chief economist. “The monthly price increase in February this year was less than what we saw in either of the past two years, which is more evidence that the trend for Canadian home prices is slowing.”
The index based on single-family, townhouse/row unit, and apartment unit sales activity in Greater Vancouver, the Fraser Valley, Calgary, Greater Montreal and Greater Toronto.