Analysis: Canada New House Price Growth Slows>

By Yali N'Diaye

     OTTAWA (MNI) - Canada new house prices edged up 0.1% in August, 

following a 0.4% increase in July, Statistics Canada reported Thursday, 

although price growth on a 12-month basis was unchanged at 3.8%. 

     House only prices were up 0.1% on the month after rising 0.6% in 

July, bringing down the 12-month growth rate to 3.5% from 3.7%. 

     Land only prices were flat on the month, leaving the 12-month 

growth rate unchanged at 4.7%. 

     Overall prices were unchanged in 15 of 27 metropolitan areas from 

July, including Toronto and Vancouver. 

     For Vancouver, which represents about 12% of the national index, 

August was the weakest performance since a 0.1% decrease last February. 

On a 12-month basis, price growth remained unchanged at 7.8%, following 

five consecutive months of acceleration from the low point of 2.7% 

reached in February. 

     In Toronto, which represents a quarter of the index, price growth 

slowed for the fourth consecutive month, to print at 6.7% in August. 

     At the provincial level, prices edged up 0.1% over the month in 

both Ontario and British Columbia, down from 0.2% in July in Ontario, 

and sharply down from 1.7% in B.C. 

     The more comprehensive Teranet-National Bank National Composite 

House Price Index also showed that price gains slowed down in August to 

13.1% from 14.2% year-over-year. 

     Both private-sector economists and the Bank of Canada continue to 

expect a housing slowdown in the second half of this year in response to 

higher interest rates, tighter housing finance regulations, and in light 

of the persistently elevated household debt. 

     However, the latest data on the construction front showed housing 

starts did not slow as much a analysts had anticipated in September, 

when the construction sector added 7,400 jobs. 

     Overall, the Labor Force Survey showed wage growth has been picking 

up along with ongoing job creation in Canada, which is more likely than 

not to continue to support demand. 

     Full-time employment surged 112,000 in September, the largest gain 

since May 2006, while hourly wages of permanent employees rose 2.2% 

year-over-year, up from 1.7% in August, and total hours worked rose 2.4% 

year-over-year after increasing 2.2% in August. 

--MNI Ottawa Bureau; email: yali.ndiaye@marketnews.com

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