OPINION: On a 12-month basis, national house prices were growing in January at their fastest post-recession pace (top chart). With prices in Vancouver having declined a cumulative 2.5% over the last four months, the strength at the national level really reflects Toronto, nearby Hamilton and Victoria (top chart). Incidentally, those are the three sole markets where house prices, together with the Composite Index, are at a record level (middle table). In the eight other metropolitan markets covered, house prices have some way to go just to come back to their previous peak. House prices in Toronto currently grow at the highest 12-month growth rate since the inception of the index. This is mostly due to dwellings other than condos (middle chart), where supply is notoriously tight. Given that Toronto is a relatively expansive market, house price growth is weighing on affordability for first time home buyers. This, together with the new rules on qualification for an insured mortgage, should sooner or later take steam out of that market.