Canadian home prices dipped in February after two consecutive months of gains, weighed by declines in Toronto and a number of other cities, data showed on Wednesday.
The Teranet-National Bank Composite House Price Index, which measures changes for repeat sales of single-family homes, showed prices were down 0.1 per cent last month compared to January.
Price growth also continued to decelerate on an annual basis. Home prices were up 7.5 per cent compared to last year, the smallest annual increase since March 2016.
On a monthly basis, prices were down in seven out of the 11 cities surveyed, including a 0.1 per cent decline in Toronto. Home sales in Canada’s largest city have been dampened by tighter mortgages rules and moves taken by the Ontario government last year to try to cool the market.
The retreat in Toronto prices, which had climbed in January, may have been due to buyers rushing into the market ahead of the new mortgage rules that came into effect at the start of the year, the report said.
In Vancouver, one of the most expensive markets in the country, prices rose 0.4 per cent to hit a record. However, the unadjusted figures, which are not smoothed to remove volatility, showed prices were down 1.3 per cent, in line with cooler home sales last month.
Economists are watching to see how Canada’s housing market adjusts to the tighter lending rules and local government regulations that have come as the central bank is also raising interest rates.
The Bank of Canada has said it is monitoring how highly indebted consumers absorb the increased borrowing costs with the economy likely more sensitive to rate hikes than it was in the past.