Teranet index of home prices for Canada's 11 largest cities grew by 4.7% year-over-year in March, accelerating from the 4.4% increase in February. This marks the first acceleration in home price growth in five months.
Today's data release showed that the deceleration in home price growth over the last four months has ebbed, as the recent drop in interest rates are continuing to bolster demand in some of Canada's largest markets. However, the underlying data indicates that the sharp decline in oil prices has taken a toll on commodity-driven markets.
Outside of these markets, economic conditions are expected to remain more favourable to housing demand thanks in part to low interest rates, a low Canadian dollar and an improving U.S. economy.
"In the near term, all eyes will be on tomorrow's Bank of Canada interest rate announcement. Most of the economic indicators in Q1 have been largely disappointing, but not quite 'atrocious'. We believe the Bank of Canada will be in no rush to either raise or lower rates in the near term, keeping the interest rate environment accommodative for housing." - said TD Economics in a report on Tuesday.
