Canadian property prices soar over 10pc

Canadian property sales prices soared over 10 per cent year-on-year in February 2014, according to the CREA.

The national average sale price rose 10.1 per cent last month compared to February 2012 to $406,372.

Growth varied across the country, with the biggest gains recorded in Calgary (+9.10 per cent) and Greater Toronto (+7.28 per cent).

Where prices are rising, though, sales are only increasing by a small margin. The number of home sales processed through the MLS Systems of Canadian real estate Boards and Associations was little changed from January to February 2014, edging up just three tenths of one per cent.

The February result follows five straight monthly declines and leaves activity 9.3 per cent below the peak reached in August 2013.

The number of newly listed homes was also little changed in February, having edged up 0.6 per cent on a month-over-month basis. As with sales activity, there was a roughly even split between the number of local markets where new listings were up from the previous month and those where they were down.

“Sales in February rebounded in some of the smaller local markets where activity was impacted by harsh winter weather in January,” said CREA President Laura Leyser.

"Sales activity this spring will be supported by the recent decline in the benchmark five-year conventional mortgage rate,” added Gregory Klump, CREA’s Chief Economist. “That’s because buyers needing mortgage default insurance who opt for a term of less than five years must qualify for mortgage financing based on that rate, and not a discounted rate that their lender may be offering. The support will be of particular importance in some of Canada’s larger urban markets where home prices are higher than those in smaller markets.”