Canadian house-price gains slow in December, amid cooling in Toronto and Vancouver

Canadian new home prices rose less than expected in December amid a pause in price growth in the hot markets of Toronto and Vancouver, though home values continued to rise in several regions in Ontario, Statistics Canada data showed on Thursday.

The 0.1 percent gain was short of analysts’ expectations for an increase of 0.2 percent. National prices have risen steadily on a month-over-month basis for nearly two years. The index excludes apartments and condominiums, which account for about one-third of new housing.

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Toronto, now one of the most expensive housing markets in the country, was unchanged after rising 22 months in a row.

Prices in Vancouver were also flat. Housing activity in the province of British Columbia began to cool last year, even before the provincial government implemented a tax on foreign homebuyers in Vancouver.

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December’s overall price increase was driven by cities in Ontario that have seen their housing markets boosted by soaring Toronto prices, including Hamilton and Kitchener, where prices climbed 0.3 percent and 0.8 percent, respectively.

Tighter mortgage lending rules put in place by the government last year are anticipated to rein in Canada‘s housing market, which has been robust since the financial crisis in the midst of low interest rates.

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But economists do not expect to see the full impact of those changes until later in 2017 and higher-than-expected housing starts data earlier this week suggested activity remained strong at the start of the year.