Canada’s New House Price Increases Slow Down
Straight from my Daily Economic Update from RBC (I wish they would quote the source of the stats. Maybe it is RBC itself.):
The new housing price index was flat in April with the annual pace of increase slowing to 5.2% down from 6.1% in March. The house-only component fell 0.1% in April and the land component posted a 0.2% increase. On a year-over-year basis, prices increased at the slowest pace since September 2005.
The house-only index feeds into the CPI calculation and was 4.9% higher than a year earlier, down from 5.7% in March and much slower than the recent cyclical peak of 12.9% (August 2006). Saskatchewan cities posted strong gains, while cites in Alberta saw price gains slow. In Regina, the index rose 7.1% in April relative to March.
The steady weakening in house price inflation as shown highlights that the pace of price gains are slowing. Despite this backdrop, however, policymakers have indicated concern that the elevated level of energy prices will continue to exert further upward pressure on the all-items index and have decided to leave the policy rate unchanged at 3%. With the Bank of Canada joining the ranks of other central banks who are worried that inflation pressures are brewing and will bolster inflation expectations going forward, the policy rate is likely to remain at 3% in the near-term.
Dawn Desjardins, Assistant Chief Economist, RBC Economics Research
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Matthew Collinge: Vancouver REALTOR®
photo credit to roland on flickr