OTTAWA— Home prices measured by a major national index surged for a sixth straight month to new highs in May but are expected to ease in the months ahead.

The Teranet-National Bank Composite House Price Index, which measures price changes for repeat sales of single-family homes in six metropolitan areas, rose 1.3% in the month, the second consecutive month in which it gained more than one per cent and the largest gain since July 2010.

The month-over-month gains were spread across all six cities covered, with all but Halifax reporting gains of 0.5% or more.

May gains were led by the Vancouver and Toronto markets, ahead 1.6% and 1.7%, respectively, and followed by Montreal (0.7%), Calgary (0.6%), Ottawa (0.5%) and Halifax (0.1%).

“The well-above-one-per-cent monthly rises of the composite index in April and May were fuelled by the Vancouver market,” said the report’s author, senior economist Marc Pinsonneault.

“Given the time lags between home sales and their entry in public land registries, it is possible that the large April and May rises of the composite index were due to front-loading of sales to beat the March effective date of an announced shortening of the maximum amortization period for insured mortgages.”

“This spike in activity is now behind us. Therefore, the recent large monthly rises in home prices in Canada should not be a lasting trend.”

On an annual basis, prices rose 4.4% in May, the same pace of advance as in May.

TABLE

Composite House Price Index for May

Metropolitan area / Index level /m/m change / y/y change
Calgary / 153.72 / 0.6 % / -4.1 %
Halifax / 134.26 / 0.1 % / 4.8 %
Montreal / 141.36 / 0.7 % / 6.3 %
Ottawa / 133.30 / 0.5 % / 5.6 %
Toronto / 128.72 / 1.7 % / 4.6 %
Vancouver / 164.92 / 1.6 % / 6.2 %
National Composite / 142.27 / 1.3 % / 4.4 %

Source: Teranet-National Bank