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Monday, September 12, 2011

House prices post biggest gain in two years

Canada's economy may have hit the skids in June, but house prices across the country still jumped almost 2%, the biggest one-month increase in two years, the latest Teranet-National Bank National Composite House Price Index report said Wednesday.

Canadian house prices were up 1.7% in June compared with the previous month, the biggest month-on-month jump since August 2009, taking the index to a new high of 144.27, the report said.

This is the third straight monthly increase of more than 1% and the seventh straight rise in a row. The index is also up 4.5% compared with a year ago.

The news comes the same day Statistics Canada reported the Canadian economy actually shrank 0.4% annualized in the second quarter, the first contraction since mid-2009.

Prices were up in all six major metropolitan markets surveyed, with Toronto leading the pack at a 2% increase. Vancouver and Ottawa came in at 1.7%, while Calgary posted a 1.6% rise, Montreal was up 1.1% and Halifax by 1%.

This is the ninth straight monthly increase for Vancouver, and index highs for five of the six cities.

Calgary is 10.9% off its record high in August 2007.

Since Teranet first started tracking prices in June 2005 with a base level of 100, home prices have jumped 44.27%.

The Vancouver index leads the pack at 167.77, suggesting prices have gone up 67.77% since 2005.

Toronto, meanwhile, has the lowest index rating at 131.26, meaning prices have accelerated only 31.26% in that time.
© The Financial Post