The TeranetNational Bank House Price Index came out todayand shows a 1.2% month-over-monthjump in December to an all-timehigh. Thats rather out of sync with the economy, to say the least. According to Stats Can figures, the rest of the economy is still in the doldrums:
unemployment was 8.3% in January, still far above the pre-recession level capacity utilizationwasaround 66%vs pre-recession peak near 80% GDP (at 2002 prices) for November was 1.2% lower than the year before
The housing market may get even more ahead of the economy as people rush to buy before some government policy initiatives kick in:
tightening of mortgage restrictions effective April 19 harmonized federal/provincial sales taxes in B.C. and Ontario start July 1 speculation that the Bank of Canada will begin to raise interest rates soon
House prices in Canada are 5.2% higher over the past 12 months. Adds the Teranet-National Bank report: The 12-month appreciation was 7.1% in Toronto, 6.2% in Ottawa, 5.1% in Vancouver, 5.0% in Montreal, 2.9% in Halifax and 0.1% in Calgary. It was the first time in 18 months that Calgary prices were higher than a year earlier. Vancouver having passed that point in November, 12-month deflation is now a thing of the past in all of the markets surveyed.