Post Category: Monthly Reports
April 12, 2018

A flat March for the Teranet–National Bank House Price Index™

The Teranet–National Bank National Composite House Price IndexTM was unchanged in March – the first time outside a recession when the March composite index was not up at least 0.2 percentage points from February and the first time outside a recession when March indexes were up for only four of the 11 metropolitan markets of the composite index – Victoria (1.0%), Vancouver (0.5%), Winnipeg (0.5%) and Quebec City (0.1%). The index for Toronto was flat. Indexes for the other six markets were all down on the month: Montreal −0.2%, Hamilton −0.3%, Calgary −0.4%, Ottawa-Gatineau −0.7%, Halifax −1.0%, Edmonton −1.3%.

The rise of the Vancouver index was the 13th in 15 months, taking it to a new high. In recent months its gains have been smaller, consistent with the relaxation of the market reported by the Greater Vancouver Real Estate Board. The Toronto index is down 7.3% from its peak of last July. The raw (unsmoothed) Toronto index has declined a similar 7.9% over that period, though its condo segment is unchanged from July – all other types of housing taken together are down 10.4%. The index for neighbouring Hamilton has declined in six of the last seven months, for a cumulative 5.9% drop from its August peak. The Ottawa-Gatineau index has declined in five of the last six months and is down 2.4% from its September peak. The Calgary and Edmonton indexes are also down from six months ago.

Because of the rise of the composite index from March to August last year, its reading for March 2018 was up 6.6% from a year earlier. This is the smallest 12-month rise since May 2016 and a ninth consecutive deceleration from the record 14.2% of last June. The March 12-month rise of the composite index was exceeded only by the indexes for Vancouver (15.4%) and Victoria (12.5%), which were followed by Halifax (6.1%), Hamilton (5.9%), Toronto (4.3%), Montreal (4.3%), Ottawa-Gatineau (3.0%), Winnipeg (2.9%), Calgary(0.4%) and Edmonton (0.2%). The Quebec City index was down 0.4% from a year earlier.
Indexes exist for seven Golden Horseshoe markets outside Toronto and Hamilton. Six of them – Barrie, Guelph, Brantford, Kitchener, St. Catharines and Oshawa – were down from last July, the exception being Peterborough. Indexes not included in the composite index also exist for seven markets outside the Golden Horseshoe, five of them in Ontario. Of the total of 14, 13 were up from a year earlier, with rises ranging from 4.4% in Barrie, Ont., to 25.3% in Abbotsford-Mission, B.C. The index for Sudbury was down 3.1% from a year earlier.

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

 

Metropolitan area Index Level
% change m/m % change y/y From peak Peak date
Report By:

Marc Pinsonneault
Senior Economist
Economics and Strategy Group
National Bank of Canada

The Teranet-National Bank House Price Index™ thanks the author for his special collaboration on this report.

The historical data of the Teranet-National Bank House Price Index™ is available™ at www.housepriceindex.ca.

The Teranet-National Bank House Price Index™ is estimated by tracking observed or registered home prices over time using data collected from public land registries. All dwellings that have been sold at least twice are considered in the calculation of the index. This is known as the repeat sales method; for a complete description of the methodology, contact us.

The Teranet-National Bank House Price Index™ is an independently developed representation of average home price changes in eleven metropolitan areas: Victoria, Vancouver, Calgary, Edmonton, Winnipeg, Hamilton, Toronto, Ottawa-Gatineau, Montréal, Québec City, Halifax. The national composite 11 index is the weighted average of the eleven metropolitan areas. The weights are based on aggregate value of dwellings as retrieved from the 2011 Statistics Canada Census. According to that census1, the aggregate value of occupied dwellings in the metropolitan areas covered by the indices was $1.168 trillion, or 53% of the Canadian aggregate value of $2.207 trillion.

All indices have a base value of 100 in June 2005. For example, an index value of 130 means that home prices have increased 30% since June 2005.

1 Value of Dwelling for the Owner-occupied Non-farm, Non-reserve Private Dwellings of Canada.
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The Teranet-National Bank House Price Index™ is an independently developed representation of the rate of change of Canadian single-family home prices.  The measurements are based on the property records of public land registries. The monthly indices cover eleven Canadian metropolitan areas: Victoria, Vancouver, Calgary, Edmonton, Winnipeg, Hamilton, Toronto, Ottawa-Gatineau, Montréal, Québec City, Halifax. The metropolitan areas are combined to form a Canadian composite index.

In addition to their informational role, the Teranet-National Bank House Price Index™ was developed to be a benchmark for financial professionals. Teranet and NBC offer licenses covering all index-linked products.

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Kan Zhu
Leader, Data & Advisory Solutions
Teranet Inc.
Phone: 416-360-8863 x 2270
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Michael Pertsis
Director, Mortgage Derivatives
National Bank Financial
Phone: 416-869-7124
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