OPINION: The last monthly increase in the composite index, the largest for a month of February since the recession, is totally due to the price jump in Vancouver. Without Vancouver, the index would have been about flat. The 12-month two-digit price gain in Vancouver is consistent with data reported by the Real Estate Board of Greater Vancouver, suggesting record sales last February together with historically low active listings (middle chart). Also, the Toronto Real Estate Board reported record existing home sales for a month of February. The high level of sales in both cities might be explained in part by the fact that the new measure requiring at least 10% down payment on the portion of the purchase price between $500,000 and $1 million applies to new mortgage applications received on February 15 or later. It is not binding for mortgage applications received between the announcement on December 11 and February 15 that do not conform to the measure, inasmuch as the mortgage is in place by July 1, 2016. So sales in these expensive cities can be stimulated over the coming months as well. In other areas, prices have overall declined lately (bottom chart), in particular in Calgary, where home price deflation has been the sharpest over the last twelve months.

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