Vancouver home prices post biggest month-to-month gain in a year

Contracted home prices for Metro Vancouver on Statistics Canada's new housing price index rose 1.2 per cent in July from June, the biggest increase among Canadian cities tracked by the national agency.

Year over year, however, Metro Vancouver new home prices were still eight per cent below their level in July 2008.

July's increase beats the 0.4-per-cent rise in Metro Vancouver's index score in May, which was the only other month in the last 15 in which Metro Vancouver's index score rose, which appears to indicate homebuilders have stemmed the price cutting they engaged in to make sales during the market downturn.

Nationally, prices for new homes rose unexpectedly in July, marking the first increase in 10 months, as the housing sector showed more signs of recovery.

Statistics Canada said its overall new-house price index edged up 0.3 per cent during the month.

Most economists had expected prices to decline 0.1 per cent in July, after a 0.2 per cent drop in June.

The July reading was the first increase in new house prices since September 2008, the federal agency said.

Following Vancouver, Hamilton saw the next biggest gain from July at 1.1 per cent, and Windsor, Ont., and Calgary, which were both gained 0.5 per cent.

"In Edmonton, prices rose by 0.4 per cent, the first monthly price increase since October 2007," the agency said. "While some builders recorded lower selling prices in July, many builders returned to regular list prices after having negotiated lower prices in previous months."

The biggest price decline was in Victoria, which fell 3.5 per cent. "In response to slow market conditions, some Victoria builders reduced their prices in order to finalize sales," Statistics Canada said.

Millan Mulraine, economics strategist at TD Securities, said "the message from this report appears to be that the buoyancy that has been seen in the Canadian existing homes market may finally be filtering through to the new homes markets."