Posthaste: Believe it or not but home prices rose in these 11 major Canadian cities

Montreal homes recorded the largest price increase, jumping to an average of $594,200 from $579,900 on an unadjusted basis in February from January. Photo by Allen McInnis /MONTREAL GAZETTE

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Rising food prices and the soaring cost of filling up at the gas pump are hitting pocketbooks hard, and you can now add housing prices to the list of financial stressors, given they rose in many Canadian cities last month according to a report Thursday from Ratehub.ca.

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“Demand for Canadian real estate remains frosty compared to recent years, but the most recent price data shows some regional markets are starting to firm up as the early spring market approaches,” the online mortgage company said in a press release.

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Ratehub said month-over-month home prices rose in 11 of 13 major cities in February, so homebuyers would have needed more income to qualify for a mortgage in most of those cities.

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Montreal homes had the largest price increase, jumping to an average of $594,200 from $579,900 on an unadjusted basis. The income required to qualify for a mortgage in the city under the mortgage stress test was $127,600 in February compared with $124,800 at the start of the year, resulting in a monthly mortgage payment increase of $76.

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“Indexed home prices for Canada were up overall,” Mike Rizvanovic, a financial services analyst at Scotia Capital Markets, said in a note, citing a 0.5 per cent month-over-month increase month over month in February.

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Rising prices aren’t what policymakers want to see.

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“We need house prices to come down so that housing is more affordable,” Carolyn Rogers, senior deputy governor at the Bank of Canada, said during a press conference last week following the decision to hold interest rates. “There isn’t really a path to affordability, particularly in some of our big centres, without house prices correcting a bit.”

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In an effort to move the needle on affordability and revive demand and construction, Ontario and the federal government on Wednesday announced that homebuyers can now qualify for a one-year exemption from the 13 per cent harmonized sales tax (HST) on newly constructed homes valued at $1 million or less.

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Halifax and Hamilton ranked second and third on Ratehub’s list, with home prices respectively rising to $558,600 from $545,200 and $736,500 from $725,100, increasing monthly mortgage payments by $71 and $61, respectively.

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The income needed to qualify for a mortgage under the stress test rules rose by $2,650 in Halifax to $120,850, and by $2,300 in Hamilton to $154,600.

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In Toronto, the average home price rose 0.4 per cent to $938,800, so the income needed to qualify rose by $890 to $193,000.

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Affordability improved in Vancouver, where average home prices fell $1,600 to about $1.1 million, and St. John’s, N.L., where they dropped by $6,300 to $389,200.

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But rising prices don’t mean that the Canadian housing market is recovering its momentum, with Rizvanovic saying that the national inventory rate tightened up in February compared to January.