Todd Korol/Reuters
A construction worker works on building new homes in Calgary, Alberta, May 31, 2010. Gross domestic product grew at a 6.1 percent annual rate, the biggest jump since the fourth quarter of 1999, and by 1.5 percent compared with the fourth quarter of last year, Statistics Canada said on Monday.
The Teranet-National Bank Composite House Price Index, which covers 11 cities, rose by a seasonally adjusted 1.4% month-over-month in July.
This was the largest gain in month-over-month terms in almost seven years.
In year-over-year terms, the index increased to a six-year high of 10.9% in July, compared to the prior month's 10.0%.
"The acceleration in national housing price growth ... reflects a spreading out of the housing mania beyond just Toronto and Vancouver," argued Paul Ashworth, the Chief North America Economists at Capital Economics.
Looking under the hood of the data, prices in Vancouver and Toronto rose by 2.5% MoM and 2.0% MoM, respectively. Meanwhile, prices rose by 0.6% MoM in the other nine cities - even factoring in the falls in Calgary and Edmonton.
Notably, Canada is implementing at 15% tax on foreign buyers in an attempt to cool the market. Some economists, including Bank of Canada's governor Stephen Poloz, had previously suggested that non-Canadian buyers might be contributing to the price increase.
"It will be interesting to see how prices respond," wrote Ashworth regarding the tax. "Our guess is that it will affect prices for a month or two, but we still believe this is mostly a domestically-driven bubble and, with interest rates only going lower, prices will rebound later this year."
In any case, Ashworth also argued that the recent dip in the Canada Real Estate Association's sales-to-listing ratio could also indicate that the housing market has "peaked."
"Overall, we might be close to peak crazy in the housing market," he concluded. "The drop off in home sales over the past couple of months suggests that the pace of house price appreciation will begin to moderate later this year."