UPDATE 2-Canada home resale price index up, no crash seen

* Month-on-month price rise of 0.3 percent in March

* Prices in four out of six metropolitan markets rise

* Group says home market not headed for U.S.-style crash
(Adds Canadian Real Estate Association report)

TORONTO, May 26 (BestGrowthStock) – Canadian home resale prices
climbed in March for an 11th straight month, but the gain was
one of the smallest since prices began rising last year,
according to a report on Wednesday.

The Teranet-National Bank Composite House Price Index,
which measures price changes for repeat sales of single-family
homes, showed overall prices rose 0.3 percent in March from
February.

“The broad slowing of monthly gains is consistent with a
general loosening of resale-market conditions across the
country. For some months now, homes have been coming on the
market faster than they have been selling,” the report said.

March’s gain was only a tick ahead of February’s 0.2
percent increase, which was the smallest monthly gain since the
end of a recession-induced price slump.

The report tracks six metropolitan areas: Ottawa, Toronto,
Calgary, Vancouver, Montreal and Halifax. The index has been
rising for almost a year.

Prices in four of the markets rose from the month before,
led by a 1.4 percent gain in Halifax. Montreal and Vancouver
both advanced 0.6 percent, and Ottawa climbed 0.1 percent.

Toronto prices were little changed on the month.

Calgary fell for a third month in a row, with March prices
down 0.3 percent from February.

Overall, the Teranet index showed prices were up 11.6
percent from a year earlier.

The index offers more evidence that Canada’s real estate
market could soon start to cool, thanks to increased housing
supply and interest rates that are widely expected to rise
through the latter half of the year.

The Canadian Real Estate Association (CREA) said last week
that home resales slowed in April while new listings climbed.
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CREA also released a report on Wednesday that said Canada
would avoid a U.S.-style housing price retreat, mostly because
of solid mortgage market trends.

The industry group described the warnings of a U.S. style
correction — a massive oversupply due to a surge in mortgage
defaults — as “overwrought.”

“Canada will avoid a massive oversupply of homes
and a sharp drop in housing demand,” CREA’s chief economist,
Gregory Klump, said.

“Canada’s solid mortgage market trends, conservative
lending practices, and prudent borrowing by home buyers mean
that Canada will avoid a U.S.-style housing price correction.”

CIBC World Markets said on Tuesday that “stabilizing forces
are already at play” in the housing market, and that higher
interest rates will lead to a modest decline in home prices,
probably between 5 and 10 percent, in the coming year or two.
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Investment Analysis
(Reporting by Ka Yan Ng; Editing by Peter Galloway and Rob
Wilson)

UPDATE 2-Canada home resale price index up, no crash seen