Home prices in Canada rose for the 15th straight month in a row in April, according to the Teranet-National Bank house price index, which once again hit its highest levels ever. But virtually all the strength seen over the past year came from just three cities — Toronto, Hamilton and Victoria.

Hamilton, Ontario, has seen rapid house price growth as Toronto homebuyers move farther out in search of affordable housing. The index, which tracks repeat sales of single-family homes over time, found Toronto led the way, with the price index rising 2.6 per cent in April. The city has seen prices jump 7.3 per cent since the start of the year, and 26.3 per cent in the past 12 months. Nearby Hamilton, which is experiencing spillover from Toronto’s housing boom, saw its price index rise 2 per cent in April and 23 per cent over the past year. Vancouver, which as recently as a year ago was showing the fastest price growth in the country, is now showing signs of slowing. The price index fell 0.1 per cent in April, and compared to a year ago, prices are up 9.7 per cent, slower than the national average of 13.4 per cent. Many market experts say Vancouver’s foreign buyer tax has pushed buyers to other cities, including to Victoria, where the price index rose 1.5 per cent in April, and 19 per cent over the past year.

Toronto, Hamilton and Victoria are leading growth in the Teranet price index. Vancouver has fallen below average, while the remaining seven markets covered by the index are treading water. “Based on the cooldown in home sales that began early last year, we expect the Vancouver growth rate to fall much lower over the next few months,” wrote David Madani, senior Canada economist at Capital Economics. But Madani expects Toronto to experience a similar cooling. He noted that the city saw a sudden, 30-per-cent spike in new home listings in April. That’s “further evidence that the surge in house price inflation is close to a peak and will drop back sharply before the end of this year,” he wrote in a client note.

House prices are rising rapidly in cities close to Greater Toronto. Not everyone agrees. National Bank senior economist Marc Pinsonnault said he doesn't see much of a slowdown in prices ahead, even with the new housing rules Ontario announced last month. The provincial government last month announced a slate of 16 measures to address a growing affordability crisis. Among them are a 15-per-cent tax on foreign home buyers, expanded rent controls and the ability for municipalities to charge a tax on vacant homes. "The effect of that tax on homes sales and home price growth will be assessed over the next few months," Pinsonnault wrote in a client note. "But even if this measure curbs speculation, it should not bring home price growth to a halt due to strong fundamentals such as job creation, immigrants from other countries and lately a net flow of migrants from other provinces. Low interest rates also contribute to the housing boom." Coming Soon: The Home Stretch Our weekly newsletter delivers the news and analysis you need on Canada's housing market. Sign up below and don't miss the first issue.