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Briefing highlights

  • Toronto, Hamilton, Vancouver prices up
  • Luxury car sales boom in Ontario, B.C.
  • Valeant shares sink on Ackman exit
  • Hudson's Bay said in talks for Neiman Marcus
  • BoE deputy governor resigns

Prices climb

Canada’s housing market is firing on three cylinders, surprisingly including Vancouver, and setting fresh records for the month of February.

The Teranet-National Bank home price index, released Tuesday, showed a gain of 1 per cent from January. That marks the fastest pace for a February in the 18-year history of this measure.

The “increase of unusual magnitude for the season” was largely because of Toronto, where prices climbed 1.9 per cent, Hamilton, up 1.4 per cent, and Vancouver, where sales have slumped but prices still rose 1.4 per cent.

In other markets, Ottawa-Gatineau gained 0.9 per cent, while several cities registered declines: Victoria, down 0.1 per cent, Montreal, down 0.2 per cent, Edmonton and Winnipeg, each down 0.5 per cent, Quebec City, down 0.9 per cent, Calgary, down 1.3 per cent, and Halifax, down 1.9 per cent.

“The declines ended upside runs of 10 months in Victoria, five months in Calgary and four months in Quebec City,” the group said.

“For Winnipeg it was the fourth straight monthly decline,” it added.

“The index for Toronto has risen in each of the last 13 months, the index for Hamilton in each of the last 12 months.”

On an annual basis, the national index rose 13.4 per cent in February from a year earlier, marking the fastest pace since November, 2006.

Here we go: Toronto prices climbed by a record 23 per cent, and Hamilton costs by a record 19.7 per cent.

Victoria gained 15.9 per cent, Vancouver 14.3 per cent, Ottawa-Gatineau 5.3 per cent, Montreal 3.9 per cent, Halifax 2.6 per cent, and Calgary 1 per cent.

Edmonton and Quebec City missed the party, slipping 0.1 and 1.8 per cent, respectively.

Like the monthly reading, the annual price gains were driven by just three cities: Toronto, Hamilton and, on this measure, Victoria.

“The Toronto market is especially worrisome,” said National Bank senior economist Marc Pinsonneault.

“In a city where apartments account for only 26 per cent of home sales, affordability of other types of dwellings has become an accute problem,” he added.

“For various reasons, supply (number of listings) on the home resale market is at an historical low, and this surely contributed to 12-month home price growth exceeding 20 per cent over the last two months for dwellings other than condos.”

We’ll have to see how prices play out in Vancouver, where a provincial tax on foreign buyers of area homes has sparked a huge drop in sales, and where prices on monthly basis have been falling or lagging, according to the index.

The average price of a detached home in Toronto’s core 416 area code now tops $1.5-million, and even semis are going for over $1-million. The surrounding regions are no slouches, either.

We’ll get further evidence on Wednesday when the Canadian Real Estate Association releases its monthly sales report.

We already know from regional reports that Toronto was up and Vancouver down last month.

“In bubble territory, Toronto stayed red-hot in frigid February, with sales climbing a little more than 5 per cent, while prices continue to rocket more than 20 per cent year over year,” said Bank of Montreal senior economist Benjamin Reitzes.

“It looks as though the new mortgage rules, which took effect in the second half of October, didn’t make a dent,” he added.

“Meantime, Vancouver has gone the other way, with sales collapsing about 40 per cent year over year, and price gains slowing sharply.”

And just so you don’t forget what all of this means to your finances, Statistics Canada will tell us what we owe, also on Wednesday.

You can bet that the quarterly report will show a fresh high for the key measure of household debt-to-income.

Actually, best not to bet. You’ll only owe more if, by chance, you lose.

Cars and homes and luxury

Luxury autos appear to be all the rage in Ontario and British Columbia, to go along with those luxury-priced, if often everyday, houses for sale.

A new analysis of the auto market by Bank of Nova Scotia economist Carlos Gomes shows sales of luxury cars and trucks in Canada have climbed 16 per cent so far this year from a year earlier, largely because of those two provinces.

“The Canadian luxury auto market has been heating up in recent months and has accounted for nearly 60 per cent of the year-to-date increase in overall volumes in Canada this year, five times its normal share,” said Mr. Gomes.

“The strength of the luxury market is concentrated in British Columbia and Ontario, the fastest-growing provincial economies.”

Indeed, sales by volume in January surged 25 per cent in B.C. and 15 per cent in Ontario, though Mr. Gomes expects the pace to slow.

Valeant tumbles

Shares of Valeant Pharmaceuticals International Inc. are tumbling fast after activist Bill Ackman and his Pershing Square Capital Management pulled out of the Canadian drug company.

Mr. Ackman had been a defender of the embattled pharmaceutical business, and Bloomberg estimates his company may have lost $2.8-billion (U.S.) on its exit.

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