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Canadian home resale prices broke a three-month string of declines in December as five of six metropolitan markets rose, the Teranet-National Bank Composite House Price Index showed on Wednesday.
The index, which measures price changes for repeat sales of single-family homes, showed overall prices were up 0.3 percent in December from November, and up 4.1 percent from a year earlier.
The heavily-weighted Vancouver and Toronto markets reported price advances of 0.5 percent, and 0.2 percent, respectively. Teranet said the latest January data from the Canadian Real Estate Association showed "generally balanced" conditions in major urban markets.
"Toronto and Vancouver could even be considered rather tight markets," Teranet said.
The Calgary market posted its first gain in five months, up 0.1 percent in December, while Montreal gained 0.5 percent.
Halifax prices jumped most, up 3.6 percent, but Teranet noted its impact on the overall index was marginal.
The Ottawa market was the only decliner in the month, down 0.4 percent, its fourth straight monthly decline.
The index tracks repeat sales, so properties with at least two sales are required in the calculations. The report did not provide actual prices.
The Teranet index is similar to the U.S. S&P/Case-Shiller home price index. It lags other home resales data by about six weeks.
Canada's housing market contrasted with the global trend during the financial crisis, posting double digit price gains in late 2009 and early 2010 after a brief dip, as low mortgage rates and a healthy banking system spurred a wave of home-buying and helped draw the country out of recession.
The sector is still relatively healthy, compared with the U.S. housing market. Standard & Poor's/Case Shiller index on Tuesday showed prices for U.S. single-family homes fell for a sixth straight month in December and warned they could fall another 25 percent.
In Canada, analysts forecast only limited price growth for resale homes from now on as increases in interest rates dampen the market. Five-year mortgage rates have started to perk up in the past month.
"The housing market has owed much of its success this year to the continued improvements in affordability and willingness of Canadians to take on additional debt. However, going forward this is unlikely to persist," said Francis Fong, economist at TD Economics.
"Going into 2011, mortgage rates are at rock-bottom levels and indebtedness is at an all-time high. With the Bank of Canada set to resume hiking rates by mid-year, the housing market will be the first to feel that pinch."
New mortgage rules, announced last month, are also expected to slow the housing sector after they start taking effect in mid March.
The rules include reducing the maximum amortization period to 30 years from 35 years for new government-backed mortgages with loan-to-value ratios of more than 80 percent, as well as tightening refinancing and the use of lines of credit secured by homes.