MNI ANALYSIS:Cdn Oct Hsg Price Gwth Slows;3Q Household Debt Up>

--New House Price Index +0.1% M/M, +3.5% Y/Y

--3Q Household Debt/Disposable Income Reaches Record 171.1%

By Yali N'Diaye

     OTTAWA (MNI) - After hovering at 3.8% for three months, Canada new 

house price growth slowed to 3.5% year-over-year in October, Statistics 

Canada reported Thursday. 

     On a monthly basis, prices edged up 0.1% after rising 0.2% in 

September. House only prices rose 0.2% and land only prices were flat on 

the month, with 12-month growth rates declining to 3.3% from 3.6% and 

4.1% from 4.6%, respectively. 

     Prices were flat in more than half of the metropolitan areas - 15 

of 27 - on the month. 

     The more comprehensive Teranet-National Bank National Composite 

House Price Index suggested the slowdown could continue in November, 

supporting the Bank of Canada's expectations of a housing market cool 

down. The Teranet index was down 0.5% from October, the third 

consecutive monthly decline. 

     On a 12-month basis, the composite index rose 9.2%, the smallest 

12-month gain since June 2016 and a fourth consecutive deceleration. 

     Statistics Canada also reported Thursday that household credit 

market debt - consumer credit, mortgage, and non-mortgage loans - rose 

1.4% in the third quarter to C$2.1 trillion, led by a 1.5% increase in 

mortgage debt to C$1.4 trillion. 

     With household debt rising faster than disposable income, the 

credit market debt-to-disposable income ratio reached a new record high 

of 171.1%, up from 170.1% in the second quarter. 

     On the net worth side, the value of household residential real 

estate declined by C$3.0 billion in the third quarter on lower housing 

resale prices, marking the first decrease since the first quarter 2009. 

     Signs of housing price inflation slowdown were also evident for new 

houses, as their 3.5% yearly gain in October was the smallest since last 

March. 

     Thursday's data reflected a contrast between Toronto and Vancouver. 

While new house price gains picked up in Toronto to 0.1% after being 

flat in September, they slowed down in Vancouver, where they rose 0.3% 

after a 0.7% gain in September. 

     On a year-over-year basis, however, prices in Vancouver rose 8.4%, 

the largest increase since July 2007, while prices in Toronto were up 

5.1%, the smallest gain since April 2016. 

     At the provincial level, 12-month price gains in Ontario slowed to 

4.9% in October from  5.9% in September, while they appreciated at a 

steady pace of 7.3% in British Columbia. They picked up slightly in 

Alberta to 0.4% from 0.3%. 

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

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