Canadian Home Prices Hit Two-Year High In August

Canadian home prices recorded their biggest gain in more than two years during August, and sales advanced for a sixth consecutive month.

The latest numbers released by the Canadian Real Estate Association (CREA) show a housing market that is rebounding in the second half of the year. According to CREA, the number of units sold climbed 1.4% in August from a month earlier and are now 17% above levels seen in February of this year.

Benchmark home prices rose 0.8% in August, the biggest one-month gain since April 2017. Toronto, Vancouver and Montreal -- the three biggest housing markets in Canada -- recorded increases in prices and sales.

CREA’s numbers align with other recent indicators that suggest housing has recovered from a slump, helped by falling mortgage rates. The run of robust housing data gives the Bank of Canada another reason -- along with robust job gains and stronger than expected output growth -- to hold interest rates at current levels even as other countries tilt toward easing policy.

CREA also updated its forecasts in its latest report. National home sales are now projected to recover to 482,000 units in 2019, representing a 5% increase from the five-year low recorded in 2018. The upward revision of 19,000 transactions brings the overall level back to the 10-year average but remains well below the annual record set in 2016, when almost 540,000 homes traded hands.