Post Category: News and Economic Reports
December 01, 2022
Housing affordability: Back to the 1980s!

Canadian housing affordability deteriorated for a seventh consecutive quarter in Q3`22 as we remain in the midst of the longest sequence of declining home affordability since the 1986-1989 episode (11 quarters).

Q3 2022

Post Category: News and Economic Reports
November 30, 2022
Housing affordability: The worst deterioration in 41 years in Q2 2022

Housing affordability in Canada worsened by 10.4 points in Q2’22, a sixth consecutive quarterly deterioration. The Q2 print marked the worst quarterly and annual deteriorations in 41 years. The mortgage on a representative home in Canada now takes 63.9% of income to service, the most since 1982.

Q2 2022

Post Category: Monthly Reports
November 18, 2022
Teranet-National Bank House Price Index experiences another monthly decline in October

MONTH-OVER-MONTH Before seasonal adjustment, the Teranet–National Bank National Composite House Price IndexTM fell 0.8% from September to October, a smaller decline than the 3.1% drop last month. After seasonal adjustment, the Teranet–National Bank National Composite House Price IndexTM decreased by 0.8% from September to October, the fourth consecutive monthly decline, but a smaller decrease than […]

Post Category: News and Economic Reports
November 18, 2022
Another price decrease in October

In October, the seasonally adjusted composite index continued to trend downward for the fourth consecutive month, with a decrease of 0.8% compared to the previous month. Although significant, the correction in property prices was less significant than that observed in the previous month (-1.9%), coinciding with a stabilization in sales during the month. Since its peak in May, the composite index (not seasonally adjusted) has already contracted by 7.7%, whereas during the financial crisis of 2008, prices only fell by 6.0% over the same period and by 9.2% in total over eight months. In a context where monetary policy will continue to be tightened in the coming months, house prices should continue their contraction and exceed that experienced during the financial crisis of 2008. Indeed, we anticipate a record cumulative decline of about 15% nationally by the end of 2023, assuming a policy rate that tops out around 4.0% and a Bank of Canada that throws some weight behind lowering rates in the second half of 2023. Although corrections are being observed in the vast majority of markets covered by the index, the CMAs that have experienced the most significant price growth over the past two years are also those that have recorded the sharpest declines to date. Ontario, British Columbia, and the Maritimes therefore appear to be more vulnerable, while the Prairie markets are less so, helped by a buoyant economic context.

November 2022

Post Category: Monthly Reports
October 20, 2022
Teranet-National Bank House Price Index sees another record monthly decline in September

MONTH-OVER-MONTH Before seasonal adjustment, the Teranet–National Bank National Composite House Price IndexTM fell 3.1% from August to September, the largest monthly decline on record since the index began in 1999 and shattering the previous month’s record decline of 2.4%. After seasonal adjustment, the Teranet–National Bank National Composite House Price IndexTM fell 2.0% from August to […]

Post Category: News and Economic Reports
October 20, 2022
Teranet-National Bank House Price Index: A second consecutive record decline in September

In September, the seasonally adjusted composite index fell by 2.0%, matching the previous month’s record decline and representing a fifth consecutive monthly contraction. Since its peak in May, the composite index (not seasonally adjusted) has already declined by 7.0%, whereas during the 2008 financial crisis, prices fell by only 6.2% over the same period and by 9.2% in total over eight months. In a context where monetary policy will continue to be tightened in the coming months, house prices should continue their contraction and exceed that experienced during the financial crisis of 2008. Indeed, we anticipate a record cumulative decline of about 15% nationally by the end of 2023, assuming a policy rate that tops out around 4.0% and a Bank of Canada that throws some weight behind lowering rates in the second half of 2023. Although corrections are being observed in the vast majority of markets covered by the index, the CMAs that have experienced the most significant price growth over the past two years are also those that have experienced the most significant declines to date. As a result, the price correction is expected to be more significant in Ontario, British Columbia and the Maritimes, while it is expected to be less significant in the Prairies, which are favoured by a buoyant economic environment.

October 2022

Post Category: News and Economic Reports
September 20, 2022
Teranet-National Bank House Price Index: Record price drop in August

In addition to recording a fourth consecutive monthly decline on a seasonally adjusted basis, the Teranet-National Bank Composite House Price Index experienced its largest contraction ever in a single month (-2.1%) due to rapidly rising interest rates and a slowing resale market. This historic drop broke the previous record of -1.3% recorded in July 2010 (left chart). August’s data were also unique in that the declines extended to almost all the 31 cities covered by the index, except for the three CMAs located in Alberta (Calgary, Edmonton and Lethbridge), which is unprecedented. The reason for these isolated increases is obviously the high price of energy and many commodities that drive the economy in this province. Since its peak in May 2022, the composite index has already fallen 4.1%, led by significant declines in Hamilton (-10.5%), Halifax (-8.7%) and Toronto (-8.3%). Significant price declines were also observed in several cities not included in the composite index, including Abbotsford-Mission and many cities in the Golden Horseshoe (Brantford, Oshawa, Barrie, Kitchener, Guelph, and Peterborough). It should be noted, however, that the significant declines in these cities follow dramatic price increases since the start of the pandemic (right chart). As the Bank of Canada continues to raise its policy rate into restrictive territory, we expect the composite index to decline from its peak reached earlier this year by 10%-15% by the end of 2023. This assumes a policy rate that tops out below 4.0% and a Bank of Canada that begins to lower interest rates in the second half of 2023 (link).

September 2022

Post Category: Monthly Reports
September 20, 2022
Teranet-National Bank House Price Index sees record monthly decline in August

MONTH-OVER-MONTH Before seasonal adjustment, the Teranet–National Bank National Composite House Price IndexTM fell 2.4% from July to August, the largest monthly decline on record since the index began in 1999. After seasonal adjustment, the Teranet–National Bank National Composite House Price IndexTM fell 2.1% from July to August, a record monthly drop and the fourth consecutive […]

Post Category: News and Economic Reports
September 15, 2022
Coming soon: Unsmoothed House Price Index

The team behind the Teranet-National Bank House Price™ Index is pleased to announce that effective September 20, 2022 we will be releasing a new series of unsmoothed indices. These unsmoothed indices will be offered in addition to the current smoothed indices released on a monthly basis. Previously published indices were smoothed to represent the average changes of the raw index within the last three months.

Given the unusually rapid changes in interest rates, the unsmoothed version of our price measures will allow for earlier detection of changes in market conditions. The provision of the unsmoothed version of the Teranet-National Bank indices will also allow users to adjust the data to their specific needs.

After the monthly release on September 20, 2022 you will notice a few changes to the website. Any graphs or charts used throughout the website will now reference the unsmoothed index. The smoothed index values will still be available when you download the data file, and you will notice the addition of a new column that includes the unsmoothed index value.

If you have any questions about the new unsmoothed index, please feel free to reach out to info@housepriceindex.ca.

Post Category: News and Economic Reports
August 18, 2022
Prices have come down from their peak in July

Declining transactions in the resale market and rising interest rates continue to weigh on property prices, with the Teranet-National Bank Composite House Price Index falling 0.2% from June to July after seasonal adjustments. This is the first monthly decline since the one seen at the beginning of the pandemic in June 2020. Using the unsmoothed seasonally adjusted index, which is more sensitive to market fluctuations, the decline is even more pronounced, with property prices falling 1.4% from June to July. Moreover, price decreases continue to be widespread across the country. In fact, for all 32 markets where the seasonally adjusted unsmoothed index was available in July, 58% experienced a decline during the month, the same proportion as observed in June, but much higher than those recorded since the beginning of the year. You have to go back to May 2020, at the very beginning of the pandemic when uncertainty was at its peak, to find such a large proportion of markets down. While the Bank of Canada has indicated that it will continue to raise its policy rate and that transactions in the real estate market should continue to decline, we anticipate that the composite index should decrease by 10% by the end of 2023.

August 2022

For further information about upcoming reports, please contact:

Derek Tinney
Director, Product
Teranet Inc.
Phone: 604-751-2252
Email:
Michael Pertsis
Director, Mortgage Derivatives
National Bank Financial
Phone: 416.869.7124
Email: