WRAPUP 1-Toronto, Vancouver drive Canadian home prices higher in April

By Leah Schnurr
OTTAWA, May 12 (Reuters) - Canadian home prices rose in
April, but the fragmented nature of the market was evident as
the major cities of Toronto and Vancouver continued to
accelerate, while oil-sensitive regions struggled.
National home prices rose 1.2 percent last month from March,
the Teranet-National Bank Composite House Price Index showed on
Thursday. The index measures price changes for repeat sales of
single-family homes.
It was the largest increase for the month of April since
2008, just before the global financial crisis hit. Compared to a
year ago, prices shot up 8.1 percent.
On a monthly basis, prices in Vancouver jumped 2.2 percent,
while those in Toronto rose 1.4 percent. Vancouver's prices have
risen by more than 2 percent each month since February.
Canada's housing market has been robust in the years since
the financial crisis, partly due to low interest rates. The
sector has become more segmented in the past year, with the
collapse in oil prices hurting commodity-linked regions even as
prices in Toronto and Vancouver accelerated.
The unchecked gains have raised concerns homeowners are
overextending themselves and could find their debt burdens too
much to bear when interest rates eventually rise. Overseas
buying is also thought to be lifting prices, particularly in
Vancouver.
"The growing bubbles in Vancouver and Toronto continue to
defy economic fundamentals," David Madani, senior Canada
economist at Capital Economics, wrote in a note.
"It's possible these bubbles will defy gravity until
long-term interest rates begin to rebound, but there is a
growing possibility they will simply collapse under their own
weight."
Calgary, where the housing market has been depressed by the
drop in oil prices, ended six consecutive months of declines
with a small gain of 0.2 percent. Prices in Edmonton slipped 0.1
percent.
Separate data released on Thursday also showed gains in
Toronto and Vancouver boosted national new home prices in March.

Prices rose 0.2 percent in March, according to Statistics
Canada, topping analysts' expectations of a 0.1 percent gain.
Prices have increased for the last 12 consecutive months.
The new housing price index excludes apartments and
condominiums, which experts say are a particular cause for
concern and account for about one-third of new housing.