Post Category: News and Economic Reports
December 12, 2018
Home prices: Second monthly drop in a row

Home price weakness in some major metropolitan areas is evidenced by a second
consecutive decline in the national Composite Index. In the most expensive markets,
new mortgage qualification rules and the rise in interest rates have cooled demand
significantly. For instance, in Vancouver, November was a fourth month in a row without
a rise in home prices, for a cumulative drop of 1.8%. In Toronto, prices declined over the
last three months, for a total loss of 0.4%. Markets are also weak in Alberta, where prices
did not rise for a fifth month in a row in Calgary, and for a third consecutive month in
Edmonton (left chart), for cumulative declines of 1.4% and 1.3% respectively. There are,
however, some areas of strength in the country. In Montreal, for example, home sales
are at a record level so far in 2018 (right chart). With interest rates set to rise more
slowly than previously thought, hopes for a soft landing of the Canadian home resale
market are still warranted.

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December 2018

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