Post Category: Monthly Reports
October 18, 2019

Underlying rise of the composite index confirmed in September

In September the Teranet–National Bank National Composite House Price IndexTM was up 0.1% from the month before. As in the three previous months, the gain was below the 21-year average for the month, which for September is 0.2%. However, as in August, the September index would have remained up slightly if corrected for seasonal pressure (seasonally adjusted). In other words, the underlying downtrend after seasonal adjustment of the months from February to July has recently given way to an uptrend.

The composite index was braked in September by declines in the indexes for Quebec City (−0.7%), Vancouver (−0.5%) and Victoria (−0.3%) and by the flatness of indexes for Edmonton and Halifax. For Vancouver it was the 14th month without a rise, for Edmonton the fourth in five months. The Victoria decline interrupted a run of five straight increases. The other markets of the composite index were up on the month: Toronto 0.1%, Hamilton 0.1%, Calgary 0.2%, Winnipeg 0.6%, Ottawa-Gatineau 0.8%, Montreal 1.0%. For Montreal it was a ninth rise in 10 months, for Toronto, Hamilton and Ottawa-Gatineau a sixth consecutive rise, for Winnipeg a fifth consecutive rise.

The previous weakness of indexes for several markets is reflected in the 12-month advance of the composite index, which at 0.7% in September was well below inflation. It nevertheless was the second consecutive acceleration of the 12-month rise. The 12-month change was pulled down by the four westernmost markets: Vancouver (down 7.1% from a year earlier), Edmonton (−3.1%), Calgary (−1.9%) and Victoria (−0.1%). The index for Quebec City was essentially flat from a year earlier. The 12-month change was positive for Winnipeg (0.5%), Toronto (4.0%), Hamilton (4.3%), Halifax (5.8%), Montreal (6.3%) and Ottawa-Gatineau (7.1%).

In addition to the Toronto and Hamilton indexes included in the composite index, indexes exist for the seven other urban areas of the Golden Horseshoe. The indexes for these markets have generally risen sharply over the last seven months after several months of downtrend. All are now up from a year earlier, some of them strongly: Oshawa 2.3%, Barrie 3.5%, Brantford 3.9%, Peterborough 4.1%, Kitchener 5.8%, St. Catharines 6.8% and Guelph 8.4%.

Indexes not included in the composite index also exist for seven markets outside the Golden Horseshoe. Of the two in B.C., Abbotsford-Mission has been struggling over the last 12 months, declining 4.3%, and Kelowna has recovered in the last six months for a rise of 1.4% from a year earlier. Of the five others, all in Ontario, Windsor (9.2%) and London (9.2%) have remained strong throughout the last 12 months while Kingston (up 7.6% from a year ago), Sudbury (5.3%) and Thunder Bay (4.5%) have recovered spectacularly in recent months.

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, Montreal, Quebec City, Halifax. The national composite 11 index is the weighted average of the eleven metropolitan areas.

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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.

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