Homeowners considering a home equity loan in order to reinvest existing equity or to make home improvements, but who may be hesitant to do so out of concern about possible falling house prices got some reassuring news about price stability. Canoe.ca reports that property prices rose 1.5% in June according to recently released numbers on the Teranet-National Bank National Composite House Price Index.
The national survey of property values showed the biggest monthly gains since August of last years, with prices rising in all six metropolitan areas covered by the survey. The June numbers represented the 14th straight gain, making this “the longest winning streak in four years.”
Canoe’s news service does caution that the hike in June numbers may be partially attributed to inordinate gains in B.C. and Ontario, where buyers rushed to close deals before the July 1st introduction of the Harmonized Sales Tax (HST) in those provinces.
“The biggest 12-month gains were seen in Vancouver, where prices rose 16.3% and Toronto, which saw gains of 16.2%,” according to the Canoe report.” Nevertheless, the biggest monthly rise reported for June was in Ottawa, “where prices gained 2.7%, followed by Toronto and Montreal.”
As many analysts have noted, June’s numbers may be somewhat inflated because of the introduction of the HST in Ontario and B.C, As a result, Teranet cautions that, “given the overall slackening in housing sales, with more homes coming onto the market than were sold, it difficult to say if the index gains are part of a trend.
Most analysts indicate that the long-term forecast is for housing prices to rise moderately in line with inflation, with very few mainstream analysts projecting anything like a U.S.-style housing slump. Accordingly, homeowners considering leveraging their existing equity through a home equity loan, for investment or home improvement purposes, should be buoyed by the Teranet numbers. With interest rates from major banks remaining near record-low levels, a well resourced mortgage broker will be able to find a home equity loan which makes sense, even to the most cautious of homeowners.
