- Robert Kavcic, senior economist at BMO Capital Markets
Canada's new home prices remained intact in March, as prices in the oil-sensitive Calgary declined for the first time in more than three years, according to Statistics Canada. The New Housing Price Index was flat at 0%, after rising 0.2% in February. The figure fell shy of analysts' expectations for a 0.1% gain. Measured on an annualized basis, prices climbed 1.2%, marking the slowest pace of growth since February 2010. In Calgary, prices fell 0.4%, the first decline since November 2011 after two months of no price change. Builders said the drop was partly attributed to promotions required to attract sales. Canada has seen a robust performance of the housing market in the years since the global financial crisis, supported by low interest rates. While that has led to some worries about the possibility of a painful correction, most economists and policy makers still predict a gradual softening.
Other residential data showed Canadian building permits enjoyed a robust recovery in March, as builders took out $6.9 billion worth of permits, up 11.6%. The nation's housing starts also surprised to the upside during the reported month, with the seasonally adjusted annual rate climbing to 189,708 units. Moreover, sales of existing homes surged 4.1%.
© Dukascopy Bank SA