A year after Finance Minister Jim Flaherty tightened mortgage rules to cool an overheating market, and a month after the CMHC announced yet another tightening of the rules surrounding home financing, The Teranet-National Bank index of home prices hit an all-time high.
Despite largely declining sales volumes over the past year, Toronto posted a 3.4-per-cent increase in house prices, while nearby Hamilton saw the biggest spike of any major city, with house prices up 6.7 per cent.
House prices were up or flat in all major Canadian cities except those in B.C., where Vancouver saw a two-per-cent house price drop while Victoria's house prices fell four per cent, on average.
The latest data has some market observers worried that Canada's residential real estate is back in overheated territory, despite softening sales and a softening pace of house price rises over the past year.
"As demand and supply imbalances continue to intensify this year and next, we still anticipate that house prices will eventually decline outright," Capital Economics economist Amna Asaf said, as quoted at the Canadian Press.
Here are the house price changes for the 11 cities measured in the Teranet index (story continues below slideshow):
The Canadian Press reports:
TORONTO - The Teranet-National Bank Canadian house price index was up 0.7 per cent in July, a below-average increase compared with the same month in recent years.
Over the past 12 years, the gain between June and July has averaged one per cent.
Compared with last year, the July index rose 1.9 per cent — slightly faster than in June but among the slowest annual rates of growth since November 2009.
Amna Asaf, an economist at Capital Economics, said the slowdown in house price inflation is in line with the more sluggish sales figures in past months.
"As demand and supply imbalances continue to intensify this year and next, we still anticipate that house prices will eventually decline outright," Asaf said in a note.
Only two of the 11 markets covered by the index showed declines from June, while Montreal was flat compared with June and eight markets showed increases.
Toronto, Edmonton, Victoria and Hamilton showed gains above national average while Calgary, Vancouver, Ottawa-Gatineau and Quebec City had smaller gains.
The local price indexes fell in Winnipeg and Halifax compared with June.