Hot Market Amidst Increase In Home Price

Data revealed that the price of homes in Canada went up last month, with Toronto continuing to be strong despite the previous government measures to have the market cool, while prices in Vancouver reached a new record with its increase. The Teranet-National Bank Composite House Price Index, which calculated the changes for recurring sale of single-family homes indicated an increase of 2.2 per cent in prices for May.

Prices were increased in the 11 cities part of the index, with Toronto leading by 3.6 per cent increase and nearby Hamilton having a 3.1 per cent rise. Although the recent figures indicated a cool down in Toronto’s market during last month, the report outline a speedy price increase in the resale market.

Compared to last year, Toronto prices went up by 28.7 per cent and 23.5 per cent in Hamilton, which was a record for both. The largest city in Canada, Toronto had an increase in home price for the fourteenth month in a row as mentioned in the report.

In the midst of concern of overheating, the government of Ontario introduced measures to have price gain under control in Toronto and nearby areas during April, which included levy on foreign buyers. Vancouver’s price went up by 1.5 per cent in that month which brought the city’s price index to a new record. However, the yearly gain slowed down to 8.2 per cent.

Last year summer, the provincial government of British Columbia had a foreign buyer’s tax imposed in Vancouver, this contributed to the cooling down of the West Coast market. Still, there are indications that the market is picking up. A warning was given by the Bank of Canada that increasing level of consumer debts and an unsteady housing market has made households to be exposed to risks.