MNI DATA ANALYSIS: A Further Welcomed Housing Price Slowdown>

By Yali N'Diaye

     OTTAWA (MNI) - For the first time since April 2015, Canada new 

house prices were unchanged on the month, bringing down the 12-month 

growth pace to 3.3% in December, the lowest since January 2017, data 

from Statistics Canada showed Thursday. 

     Prices were unchanged on the month in 15 metropolitan areas, up in 

eight and down in four. 

     House only prices were also unchanged on the month, for a 12-month 

gain of 3.2%, down from 3.3% in November. 

     Land only prices edged up 0.1% after being flat in November, and 

rose 3.7% year-over-year, up from 3.6% in November. 

     --TORONTO STABILIZES 

     The Bank of Canada, which is expecting higher mortgage rates and 

tighter macro prudential rules to cool down the housing market, is 

keeping a close eye on trends in Vancouver and Toronto, the country's 

tightest markets. 

     In its January 30 Housing Market Assessment, Canada Mortgage and 

Housing Corporation said prices and overvaluation leave Canada's housing 

market in a "high degree of vulnerability." 

     CMHC estimated in a report Wednesday that house prices increased by 

48% in Vancouver from 2010 to 2016, and 40% in Toronto, a trend that led 

BOC to voice concerns over speculative behavior and overpricing last 

year. 

     Tighter macro prudential measures introduced by the province of 

British Columbia in the summer of 2016 were followed by a price 

appreciation slowdown in Vancouver until early 2017, when they 

accelerated again. 

     After tighter measures were introduced by Ontario last Fall, the 

central bank is monitoring whether Toronto will follow the same pattern. 

     Since reaching a low point of 2.7% in February, 12-month price 

growth has been accelerating in Vancouver, reaching 8.9% in December, 

the highest rate since July 2007, with builders citing "strong demand." 

     In Toronto, prices were flat on the month, as has been the case for 

six of the previous seven months, and rose at a steady pace of 4.7% 

year-over-year. Year-over-year prices have been on a slowing trend since 

reaching a peak at 9.9% in April 2017. 

     --2017 PRICE PICKUP 

     At the provincial level, prices were flat in Ontario in December, 

for a 12-month gain of 4.5%, down from 4.6% in November. 

     In British Columbia, prices rose 0.2% on the month and 7.8% 

year-over-year, following a 7.6% 12-month increase in November. 

     For Canada as a whole, prices slowed in the fourth quarter to 3.4% 

on a year-over-year basis from 3.8% in the third quarter. 

     However, for 2017, the annual average price gain was 3.7%, up from 

2.5% in 2016. 

     Yet the price slowdown at the end of 2017 was a welcomed 

development for the BOC's scenario. 

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

[TOPICS: MACDS$,M$C$$$]