MNI CANADA IMPACT: Vancouver Home Prices Fall Most Since 2014>

By Greg Quinn

     OTTAWA (MNI) - Vancouver new home prices fell the most in almost 

five years, reflecting efforts by policy makers to prevent the market 

from overheating. 

     Statistics Canada's index dropped 0.9 percent in May from a year 

earlier, the most since September 2014. On a month-over-month basis, 

prices fell 0.3 percent.

     In Toronto, the other city that has drawn concerns about a sudden 

correction, new home prices fell 0.3 percent in May from April and by 

0.6 percent from a year earlier. 

     The two cities together carry a weight of 43 percent of the 

national index, which declined 0.1 percent on the month and was 

unchanged from a year earlier. Prices were flat in the previous three 

months. 

     The index has been little changed since the start of 2018, ending 

years of gains during a housing boom in Toronto and Vancouver. 

Governments have introduced regulations to slow the pace of mortgage 

lending and clamp down on speculation in Canada's biggest cities, where 

resale prices for single-family homes now often top C$1 million. The 

Bank of Canada said Wednesday the hosuing market is stabilizing. 

     "Higher home prices, mortgage rate hikes and the federal government 

stress test remain some of the factors influencing the demand for 

housing," Statistics Canada's report said. "Potential buyers now need to 

save for a larger down payment in order to qualify for a mortgage."

     The report covers single-family homes and some semi-detached 

properties like row houses, but doesn't track condominiums that have 

been a major source of growth in Vancouver and Toronto. 

--MNI Ottawa Bureau; email: greg.quinn@marketnews.com

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