May 15, 2014
The gains come even after a sluggish winter for home sales, and forecasts from a number of economists for price growth to peter out.
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Teranet-National Bank’s house price index, which tracks 11 cities, hit an all-time high in April, with prices rising 0.5% from March and 4.9% from a year earlier.
“Home prices are starting to show early signs of accelerating – even when adjusting for quality,” TD Canada Trust Economist Diana Petramala wrote in a research note after the numbers came out, saying prices have maintained more momentum this year than TD economists anticipated. “We continue to believe that home price growth will moderate in the second half of 2014,” she added.
In the meantime, Royal Bank Economist Robert Hogue says that prices are rising faster than incomes. And if the current pace of price growth keeps up, that could be problematic. “This is starting to get uncomfortable, because it’s going to affect affordability,” he said