In September the Teranet–National Bank National Composite House Price IndexTM was down 0.8% from the previous month, the largest monthly decline since September 2010 and the first of any size since January 2016. The retreat was due to a 2.7% drop of the index for the Toronto market, the country’s largest. Indexes for four other metropolitan areas of the composite index were also down on the month: Quebec City (−2.3%), Hamilton (−1.9%), Halifax (−0.4%) and Winnipeg (−0.3%). The index for Victoria was flat. For the remaining five markets, indexes were up: Vancouver 1.3%, Calgary 0.7%, Montreal 0.3%, Ottawa-Gatineau 0.3% and Edmonton 0.2%.
The raw index* for Toronto fell 3.1% in September, for a cumulative decline of 7.5% from July. This drop is entirely consistent with the recent loosening of market conditions in metropolitan Toronto. The loosening has consisted of a shift from very tight to balanced. Therefore, current market conditions are far from being typical of an economic recession. In Vancouver, the index had dropped following the implementation in August 2016 of a tax on foreigners’ acquisitions. But market conditions remained tight and at the beginning of this year, the index regained all the ground lost and has set new records in each of the last five months. Victoria’s has set a new record for a seventh straight month. Otherwise, the September roster of individual market indexes setting new records has shifted from previous months; the other two are Ottawa-Gatineau and Montreal, where market conditions have been tightening recently.
- Composite 11
- All Metropolitan Indices
- British Columbia
- New Brunswick
- Nova Scotia
Among 14 markets not included in the countrywide composite index, 12 of them in Ontario, indexes were down on the month for several markets in the Golden Horseshoe: Barrie (−4.5%), Brantford (−1.3%), Kitchener (−1.4%), Oshawa (−3.3%), and Peterborough (-0.7%).
In September the composite index was up 11.4% from a year earlier, a second consecutive deceleration from record 12-month gains of 14.2% in both June and July. The September 12-month rise was led by Toronto (18.0%), Hamilton (19.5%) and Victoria (14.7%). Vancouver’s rise of 10.5% from a year earlier was strong but below the countrywide average. The 12-month advance was much smaller in Ottawa-Gatineau (5.2%), Montreal (5.0%), Calgary (2.6%), Edmonton (1.4%), Winnipeg (1.2%), Quebec City (1.1%) and Halifax (0.4%).
Index values were up from a year earlier in all 14 of the markets not included in the composite index, though the 12-month increase ranged widely from 2.5% in Thunder Bay to 27.9% in St. Catharines.
*Note on methodology: The current-month data used to calculate the index are those of closed sales registered in the provincial land registry. To illustrate the home price trend, the published indexes of the 11 metropolitan markets entering into the Teranet–National Bank Composite House Price Index™ are moving averages of the last three months of raw indexes, a procedure that evens out month-to-month fluctuations. More granular monthly data are available upon request, subject to subscription fees. For our full methodology, please visit www.housepriceindex.ca
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Economics and Strategy Group
National Bank of Canada