House prices across the country hit another national record in June as the average cost rose to $315,332, the Canadian Real Estate Association said Monday. Between June of this year and the same month in 2006, average home prices rose by 11.2 per cent, the biggest 12-month increase since August 2006, CREA said.
The group also said average prices broke records in Alberta, Saskatchewan, Ontario, New Brunswick, Nova Scotia, and Newfoundland and Labrador. British Columbia continued to have the highest average house price at $446,893 in June, though that was down from $454,962 in May. The biggest 12-month jump in average June prices was seen in Saskatchewan, where prices rose 34.9 per cent from June 2006 to $180,934. Alberta has the next-largest increase among the provinces, with a 12-month jump of 24.7 per cent to $364,072.
On July 10, the Bank of Canada boosted its key overnight interest rate by one-quarter of a percentage point to 4.50 per cent. The increase was the first hike by the bank since May 2006, and economists expect the bank will boost rates again in September. "Higher interest rates and additional housing price increases will gradually impact affordability and housing demand over the second half of the year," said CREA economist Gregory Klump.