Canadian new home prices in May grew at their fastest pace in almost nine years, soaring 0.7 per cent from April on strength in the booming markets of Toronto and Vancouver, Statistics Canada said on Thursday.
Analysts polled by Reuters had predicted a 0.2 per cent advance. May’s increase was the largest since the 1.0 per cent jump recorded in July 2007.
The Liberal government is concerned about rapidly rising prices in Toronto and Vancouver and is mulling more restrictions on mortgages.
The combined region of Toronto and Oshawa – which accounts for 27.92 per cent of the entire Canadian market – posted a 1.9 per cent gain, the highest in 27 years. Builders cited market conditions and the price of land.
Market conditions also helped drive up new home prices in Vancouver by 1.1 per cent.
Overall, housing prices increased by 2.7 per cent from May 2015, the largest year-on-year rise since the 2.7 per cent advance seen in September 2010.
The new housing price index excludes apartments and condominiums, which the government says are a particular cause for concern and which account for one-third of new housing.