Home prices keep climbing, though gains are slowing

OTTAWA — A monthly measure of Canadian home prices showed that year-to-year gains continued in January, albeit at a slower pace than in December.

The Teranet-National Bank house price index was up 6.5% from a year earlier. That was down from 6.8% in December.

While the index showed some slowdown in the rise of prices, it was still “surprisingly large,” said National Bank senior economist Marc Pinsonneault.

“If such increases were repeated over the next months, the federal government might react with stricter mortgage rules,” a possibility that has already been suggested prior to Thursday’s budget release, he said in a research note.

The index is composite of prices from six different metropolitan areas — Ottawa, Toronto, Calgary, Vancouver, Montreal and Halifax. It tracks home prices on land registries that have been sold at least twice.

That’s different from other methods of gauging real estate prices, such as simply taking an average of listed-sale prices, which some critics say is skewed by extreme high or low values of the sales that happen to occur in the measured time frame.

Looking at how local area price indexes changed in January, Toronto’s was up 9.9%, Calgary up 1.6%, Vancouver up 7%, Montreal up 5.6%, Ottawa 5.4% and Halifax 1.8%.