Bloomberg Businessweek reports that Canadian housing prices rose 1.3% in May. This moderate gain marked the 13th straight month of housing price increases, and the longest streak of price increases since September 2006 –-well before the marked decline in U.S. housing prices.
The slow but steady rise in housing assets tracked by Teranet-National Bank Composite House Price Index means that there continues to be growing equity in Canadian housing stocks, buoying the confidence of homeowners who may be considering utilizing a home equity loan for housing improvements, purchasing investment properties, or for other big ticket consumer durables such as appliances.
Bloomberg cites the Bank of Canada’s recently released 2nd Quarter Monetary Policy Report, which indicates that housing investments – which effect overall house price levels – is likely to remain somewhat slack over the balance of the year, reflecting “the expiry of the renovation tax credit, the tightening of mortgage criteria and the rise in mortgage rates.”
The Bank of Canada hiked its benchmark lending rate from 0.5% to 0.75% at its scheduled meeting on July 20th. In its Monetary Policy Report, Canada’s central bank observed that, “the economic recovery in Canada is proceeding largely as expected, supported by fiscal and monetary stimulus, higher terms of trade, improved labour markets and household confidence and the recovery in the global economy.”
