OTTAWA (Reuters) - New home prices rose by a stronger-than-expected 0.3 percent in November from October but continued to subside in the pricey Vancouver market, according to Statistics Canada data released on Thursday.
Analysts surveyed by Reuters had expected a 0.2 percent rise. On a yearly basis, prices rose 2.5 percent, the same rate as in October.
But prices eased in closely watched Vancouver. The coastal city has Canada's most expensive property market. A surge in prices and sales there that followed the recession had caused concern about a possible bubble.
The latest data showed prices in the city have fallen gently or held steady in the last six months, and are now 0.2 percent lower than November 2010. From October to November, they were down 0.3 percent.
Prices in eastern and central Canada were rising, on the other hand. In Toronto and neighboring Oshawa prices rose 1.0 percent on the month and 6.2 percent on the year. Prices in the Prairie cities of Winnipeg and Regina were also more than 5 percent higher on an annual basis.
The latest report comes after data on Tuesday showed Canadian housing starts climbed more than expected in December.
Canada's housing sector, which did not experience the subprime mortgage boom and bust seen in the United States, played a key role in lifting the economy out of recession as ultra-low interest rates drove sales and prices higher.
But many Canadian policymakers fear the market's post-recession boom, combined with a long run of low lending rates, could create a fresh asset bubble.
Bank executives told a Toronto conference on Wednesday that the Vancouver and Toronto condo markets were particularly vulnerable.
The Royal Bank stress tests itself for a 25% drop in RE and says it is comfortable but then there is the economy...
ReplyDeleteFrom the Globe and Mail
Mr. Nixon said RBC has conducted stress tests on its books for a decline in housing prices of as much as 25 per cent. Though the bank doesn’t figure the situation will become that dire, it is comfortable its lending operations could withstand such a large hit if one were to occur, particularly in the Vancouver and Toronto condominium markets. The bank’s exposure to the Canadian condo development market is about $2-billion, Mr. Nixon said.
“We feel very comfortable that we can manage through a significant downturn,” Mr. Nixon told analysts. “But again there would be ancillary impact,” he added, suggesting the bigger concern would be a downturn in the broader economy, in terms of housing demand and growth.
FWIW I looked up the assessment for my place that I sold in late September and the assessment is down YoY. It was only 4% lower than last years assessment but very interesting to see nonetheless.
ReplyDeleteI'm hearing, like all years, assessments all over the map. Detached properties seem to be booking large YOY gains. That's going to stress some people out when they get "the bill" in a few weeks.
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