Canadian home price growth continued to slow in Feb

The Teranet home price index for Canada's 11 largest cities rose 4.4% (year-over-year) in Feb, decelerating slightly from the 4.7% increase in Jan. This marks the fourth straight month of decelerating home price growth. 

The composite six index (which covers the cities of Vancouver, Toronto, Calgary, Montreal, Ottawa-Gatineau and Halifax) was up 4.6%, following a 4.8% gain in January. On a month-over-month basis, both the overall and composite six index were up 0.1%, increasing for the second consecutive month.

TD Economics notes as follows in a report on Thursday:

• The four-month trend of slowing price growth is consistent with our expectations of a moderation in home price growth over the next two years. That said, the national outlook masks a growing regional divide between the oil-producing and non-oil producing regions.
  
  
• This month, the deceleration in home price growth for commodity-driven housing markets was well anticipated. The effects of significantly lower oil prices had already turned up in resale activity, with sales in Calgary and Edmonton down more than 40% and 30% respectively, from October to Jan. Today's data release indicates that cracks are also beginning to appear in Edmonton. These trends are expected to continue, with commodity-driven markets (including St. John's) likely to experience price corrections of up to 10% peak-to-trough through the year.
  
  
• Elsewhere, economic conditions are expected to remain more favourable for housing activity due to a rising U.S. economy, a low Canadian dollar and lower-for-longer interest rates. That said, the impact of lower rates on the housing market is likely to be modest due to a lack of pend-up demand and deteriorating affordability in a few major markets. Meanwhile, an increasing trend in listings is likely to keep home  price growth in check for most major markets.