Home prices decline for second consecutive month

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Canadian home prices were down for the second month in a row, according to the Teranet-National Bank House Price Index.

The 0.2 per cent decline in December followed a similar decline in November, and two flat months in September and October.

However, experts point to the decline as being orderly, and are not predicting a large correction for the market.

“This recent trend is consistent with the fact that the Canadian resale market has remained in the midst of its balanced zone for more than a year,” said National Bank senior economist Marc Pisonneault. “This development, coupled with a slow rise in interest rates, remains consistent with our view that the Canadian housing market will experience a soft landing.”

Victoria, Ottawa-Gatineau and Vancouver were down for the third consecutive month with decreases of 0.8 per cent, 0.5 per cent and 0.3 per cent respectively. Toronto declined by 0.3 per cent, the city’s second consecutive decline, and Montreal was down 0.5 per cent after an increase in November.

Of the 11 metropolitan markets surveyed five showed increases with Calgary ending three months of decreasing values with a 0.7 per cent increase over November. Prices were up 0.3 per cent in Quebec City, 0.6 per cent in Winnipeg, 0.7 per cent in Hamilton and 0.9 per cent in Halifax. Edmonton prices were flat.

For the first time since September 2010 prices in all 11 metropolitan markets were up from 12 months earlier. An overall increase of 6.8 per cent from December 2010 showed a slight deceleration from 7.1 per cent in November. Toronto and Winnipeg led the market with annual increases of 9.9 per cent and 8.7 per cent respectively.

The report noted the Canadian Real Estate Association was reporting seasonally adjusted ratios of new listings to sales showing market conditions generally balanced in the country as a whole for January 2012.

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