Canadian house price index up 5.4% in October

TheTeranet-National Bankindex of home prices rose 5.4 per cent from last year in October, led by strong annual increases in Vancouver, Calgary, Hamilton and Toronto.

On a year-on-year basis, all 11 cities measured in the index saw house prices rising, with the exception of Victoria, where prices fell 0.1 per cent from October 2013.

• Toronto, Vancouver home prices continue to surge

• Average Canadian house price rises 5.3% to $398,618

The index is now at a record level, reflecting continued demand for resale homes as mortgage rates remain low. The index has been rising for 11 straight months.

The results highlight the unevenness of the increases in house prices across the country.

4 cities driving jump in prices

In Calgary, home prices are up 9.1 per cent on the year; in Toronto, 7.4 per cent; in Hamilton, 7.3 per cent; and in Vancouver, 6.5 per cent. The resale market in these four urban areas is balanced or tight, meaning homes to buy are in short supply, Teranet reports.

The 12-month rise was more moderate in Edmonton (4.9 per cent), Winnipeg (2.5 per cent), Montreal (1.1 per cent) and Quebec City (1.0 per cent).

On a month-to-month basis, the results aremore uneven, with prices down from the month before in Victoria, Toronto, Edmonton, Winnipeg, Ottawa-Gatineau and Halifax.

The headline number masks some divergence in performance, with the rise in prices relative to September due entirely to gains in Vancouver, TD Bank economist Brian DePratto said in a note to investors.

Some price softening was observed in more than half of the major markets, due in part to some modest oversupply, particularly of condo units.

DePratto calls the current market pricing healthy.

The present environment of low interest rates and steady employment gains continues to provide solid support to the housing market, he said.