* MLS Index shows prices up 1.3 pct in March from February
* Up 5.1 pct from March 2011
* Year-on-year increase among smallest since June
* Toronto sees biggest gains, Vancouver prices slow
* Prices rise in all metropolitan markets
By Jon Cook
TORONTO, April 27 (Reuters) – Canadian home prices climbed
5.1 percent in March from a year earlier, boosted by strong
gains in Toronto, but the annual increase was one of the weakest
in the past year, suggesting the recently buoyant national
market may be cooling.
The Canadian Real Estate Association (CREA) said on Friday
its recently launched MLS Home Price Index rose to 152.9 last
month, a 1.3 percent rise from February and a 5.1 percent gain
from March 2011.
The index had also risen at a 5.1 percent annual pace in
February, the smallest increase since June.
“Overall price trends show that Canada’s housing market
continues to moderate,” Wayne Moen, president of the CREA group
of real estate agents, said in a statement.
“While that trend paused in March, it may in part reflect an
early spring in many parts of the country, resulting in
increased competition among buyers.”
The index, which monitors housing prices in five major urban
markets, did not provide actual prices. A separate CREA report
released on April 16, which used a different methodology, had
shown that prices fell in March from a year earlier.
Both reports, however, showed a slowdown in British
Columbia’s formerly red-hot housing market.
The latest data showed prices in March rose slightly from
the previous month in Vancouver, and in British Columbia’s Lower
Mainland and the Fraser Valley areas. But on an annual basis,
the pace of price gains moderated.
Vancouver’s year-over-year increase in March was 5.3
percent, compared with a 6 percent annual rise in February. The
Lower Mainland market was up 4.78 percent for the year in March,
compared with a 5.5 percent gain the previous month.
Those slower price gains were offset by continued strength
in Toronto, which once again led all markets. Prices rose 1.65
percent from February and 7.35 percent from March 2011, in line
with the Toronto market’s year-over-year gain the previous
month.
Prices rose in all five of the metropolitan centers covered
by the index, with Montreal up 1.5 percent and Calgary up 1.4
percent from a month earlier.
The data was in line with the April 16 CREA report that
showed the average selling price in Vancouver fell 3.1 percent
from a year earlier to C$761,742 ($774,200).
Canada’s housing sector did not experience the subprime
mortgage boom and bust that drove the United States into
recession. It has since had a post-crisis property market rally,
triggered by record low borrowing costs.
But Bank of Canada Governor Mark Carney and Finance Minister
Jim Flaherty have both expressed concern about the housing boom,
with Flaherty tightening mortgage rules several times to try to
cool the market.
In legislation introduced on Thursday, Flaherty said he was
giving Canada’s bank watchdog the job of making sure that the
Canada Mortgage and Housing Corp – a federal agency that is the
country’s biggest seller of mortgage insurance and a major
provider of mortgage-backed securities – doesn’t stoke an
already hot property market and create financial instability.
“We watch the market closely, and I particularly watch the
condo market in Vancouver, Toronto and to some extent in
Montreal as well,” Flaherty said.
