May was the biggest month for Toronto new home prices in 27 years.
Prices in Canada’s largest metropolitan area rose 1.9 percent in May, and were up 6.4 percent from a year earlier. Nationally, home prices rose 0.7 percent in May, the largest monthly increase since 2007, Statistics Canada reported Thursday.
The data adds to evidence that Toronto’s housing market may be overvalued. Policy makers including Bank of Canada Governor Stephen Poloz have warned price gains there and in Vancouver are unsustainable.
Builders cited market conditions and the higher cost of land as reasons for the gains in Toronto, where new house prices have been rising for 16 consecutive months, Statistics Canada said.
New house prices in Vancouver also recorded large gains in May, rising 1.1 percent in the twelfth consecutive monthly gain. Prices in the west-coast city are up 5.1 percent from a year earlier.
Nationally, new home prices rose 2.7 percent from a year earlier, the largest increase since 2010.
Economists were expecting a national increase of 0.2 percent in May and 2.2 percent from a year earlier, according the median estimate in a Bloomberg survey.
Statistics Canada’s new home price index doesn’t include condominiums or apartments, which comprise about a third of the new real estate market.