House prices down in Vancouver, up in Toronto

The Teranet-National Bank house price index clocked an increase of 0.5 per cent in May, the worst performance ever for the month in the history of the index that dates back to 2008. May usually sees strong upticks in housing prices. Compared to a year earlier, prices are up 0.7 per cent, the weakest showing since the last recession, National Bank of Canada economists wrote in a client note Wednesday. Prices are down from a year ago in:

Vancouver (-4.1 per cent)

Calgary (-3.2 per cent)

Winnipeg (-1.5 per cent)

Edmonton (-1.1 per cent)

Victoria (-0.4 per cent)

Prices are up in:

Ottawa-Gatineau (+6.1 per cent)

Montreal (+5.3 per cent)

Hamilton, Ont. (+5.1 per cent)

Toronto (+2.6 per cent)

Quebec City (+2.1 per cent)

Halifax (+2.1 per cent)

Despite the current weakness, economists Matthieu Arseneau and Kyle Dahms say they see signs of a bounceback. “Home sales increased for a third month in a row in May, rebounding close to their past 10-year average, a development which was made possible thanks to a booming labour market and a plunge in mortgage rates,” they wrote.

Loonie spikes as Canadian inflation heats up

Consumer prices accelerated in May, rising 2.4 per cent from a year ago. It’s the largest jump since last October, Statistics Canada said, and it’s well above analysts’ expectations of a 2.1-per-cent reading. All eight major components, including food, transportation and housing, saw increases in May. The news caused the Canadian dollar to jump, rising rapidly on Wednesday morning to above 74.9 cents U.S., from below 74.7 cents U.S. in earlier trading. Investors are betting the stronger-than-expected inflation is a sign that Canada is coming out of its economic slowdown. The country’s economy barely grew in the final quarter of 2018 and first quarter of this year, but economists see a rebound in the second quarter.