13 Aug Soaring Victoria and Toronto home prices led red-hot July market

From the Globe and Mail Canada’s housing market had one of its strongest Julys on record, with national home prices rising 2 per cent.

It was the second-largest jump in July since Teranet-National Bank began tracking the market through its house price index in 1999, helping to push overall home prices up nearly 11 per cent from the same period last year.

In a trend that has dominated much of the year, prices soared in Toronto and Vancouver, along with neighbouring Hamilton and Victoria, while sinking in Alberta, Quebec and the Atlantic provinces.

Month over month, home prices rose 3.8 per cent in Victoria, 3.1 per cent in Toronto, 2.4 per cent in Hamilton and 2.3 per cent in Vancouver.

The Vancouver region booked its 18th straight month of price gains, with the housing market breaking new records every month. The strong sustained growth pushed prices up 24.3 per cent in Vancouver from July last year.

Prices have surged in Vancouver in July even as sales fell 19 per cent in the region from the same period last year. Some have pointed to the slowdown in home sales as evidence that the B.C. government’s July announcement of a new 15-per-cent property tax on sales to foreign buyers in Metro Vancouver will spark a price correction in a market that was already starting to level off. The new tax took effect this month.

National Bank senior economist Marc Pinsonneault isn’t so sure, pointing to a lack of available listings to meet demand, along with strong employment growth in the region as two factors that will continue to push prices higher. “The story is not solely about alleged foreign capital flows,” he wrote.

Beyond Vancouver, the red-hot July housing market also helped push up prices 14.7 per cent in Victoria from the same period last year and more than 13 per cent in Toronto and Hamilton. It was the third straight month of strong price growth for Hamilton. “Such a rate of growth in prices had not been observed before in that region,” Mr. Pinsonneault wrote.

Outside of Canada’s hottest housing markets, prices have been largely been flat for the past 12 months.

Monthly prices rose 1.7 per cent in Ottawa and 1.6 per cent in Winnipeg. In Montreal, a 0.6-per-cent monthly jump helped push prices above their previous peak in July, 2014.

It was a different story in Alberta and Atlantic Canada. Home prices fell 0.1 per cent in Calgary, and fell 0.4 per cent in Halifax. Prices also fell 1.6 per cent in Quebec City.