Analysis:Canada New Hse Price Growth Slows To 3.8% Y/Y In July>

--Vancouver, Toronto Still Diverging

By Yali N'Diaye

     OTTAWA (MNI) - Canada new house price growth slowed to 3.8% 

year-over-year in July from 3.9% in June, with trends in Toronto and 

Vancouver, two of the country's largest markets, continuing to evolve in 

opposite directions, data Statistics Canada showed Thursday. 

     Market conditions in Vancouver helped pull Canada's monthly prices 

up 0.4% on the month, following a 0.2% increase in June. 

     House only prices rose 0.6% on the month and 3.7% year-over-year, 

and land only prices were up 0.2% from June and 4.7% from July 2016. 

     Regionally, data continued to show diverging trends between 

accelerating price inflation in Vancouver and slower price gains in 

Toronto. 

     Prices in Vancouver rose 2.0% on the month, picking up from 1.5% in 

June. On a 12-month basis, prices have been accelerating since March, 

when the were up 3.0%, to 7.8% in July, the largest gain since July 

2007. 

     Since the beginning of this year, prices in Vancouver have risen 

7.7% on "strong demand for housing," Statistics Canada said. 

     Prices in British Columbia rose 1.7% on the month and 6.8% 

year-over-year, following a 5.5% 12-month gain in June. 

     The province introduced a Home Partnership plan in January, 

allowing first-time home buyers to qualify for a loan from the province 

under advantageous conditions, the amount of which matches the down 

payment of borrowers up to 5% of the value of the house, with a maximum 

of C$37,500. 

     Conversely, in Toronto, which represents one fourth of the index, 

prices were unchanged on the month, for a 12-month increase of 7.4%, the 

smallest since September 2016. 

     Overall, prices in Ontario rose 0.2% on the month and 6.4% 

year-over-year, following a 7.1% 12-month increase in June. 

     The province introduced tighter housing measures on April 20, which 

was followed by a housing slowdown in the area pointed out by the Bank 

of Canada. 

     In Alberta, prices improved, recovering 0.5% in July after edging 

down 0.1% in June. On a 12-month basis, prices were flat after 

contracting 0.4% in June. Still, overall market conditions remained 

weak, as well as in Saskatchewan, another oil producing province. 

     "Reflecting continued weakness in the housing market, CMAs 

(metropolitan areas) in Alberta and Saskatchewan recorded three of the 

four year-over-year declines," the report said. 

     Overall, 12 of 27 metropolitan areas posted monthly price gains, 

the remaining 12 seeing no change on the month. On a 12-month basis, 

Saskatoon, Edmonton and Regina recorded declines, as well as St. John's. 

     The nationwide price slowdown could continue in August, based on 

the more comprehensive Teranet-National Bank National Composite House 

Price Index, which was up 13.1% year-over-year after rising 14.2% the 

previous month. 

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

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