Post Category: Research
October 13, 2016
NBFM Economic News – Canada: House prices up 0.8% in September

OPINION: In Vancouver, after seven large monthly house price increases in a row, prices were virtually flat in September (top chart). This is consistent with the recent loosening in the home resale market, as sales dropped each month since their record level last February for a cumulative decline of 44% (middle chart). Prices in Vancouver have not fell so far because market conditions have just started to loosen from the tightest conditions on records. We see home price deflation starting soon (10% expected over twelve months). Toronto is now the red hot market. Home sales broke records in each of the last three months. But the historically low supply (in terms of the number of homes listed for sale) is also contributing to market conditions that are the tightest on records (bottom chart). With such a combination of high demand and low supply, monthly house price growth surged to 2.9% on average over the last four months. While the latest measure (maximum debt-service-to-income ratio for insured 5-year fixed-rate mortgage tested against posted mortgage rate) might reduce demand, the low supply still argues against a significant price decline in the Queen City.

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Post Category: Research
September 14, 2016
NBFM Economic News – Canada: House prices up 1.5% in August

OPINION: In August, the dichotomy in the Canadian home resale market continued, with large gains in the four metropolitan areas (Vancouver, Toronto, Victoria and Hamilton) that have been driving the national index recently. Apart from these four regions, prices have overall decreased over the last 12 months (top chart). That being said, for the first time in seven months, the monthly price increase in Vancouver was below 2%. Market conditions, although still tight, have eased in that city with the decrease in home sales since their peak last February. That sets the stage for a moderate price correction in Vancouver. In contrast, due to a combination of high sales and shrinking supply, market conditions are the tightest in Toronto since at least 14 years, with the number of dwellings listed for sale representing only 1.1 month of sales (middle chart). As a result, house prices growth in Toronto has accelerated to a monthly average of 3.1% over the last three months. On a year-over-year basis, price increases in these two metropolitan areas have accelerated for condos as well as for other types of dwellings (bottom chart).

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Post Category: Monthly Reports
September 14, 2016
Home Prices Up 1.5% In August

In August, the Teranet–National Bank National Composite House Price Index™ was up 1.5% from the previous month, the third-largest August rise since the Index series began in 1999. However, the advance was not very broad-based; prices were up in seven of the 11 metropolitan markets surveyed. Monthly gains exceeded that of the countrywide index in […]

Post Category: Monthly Reports
August 12, 2016
Home Prices Up 2.0% In July

In July, the Teranet–National Bank National Composite House Price Index™ was up 2.0% from the previous month, the second largest July increase since the Index series began in 1999. The advance was not very broad-based; prices were up in only seven of the 11 metropolitan markets surveyed. Gains exceeded that of the countrywide index in […]

Post Category: Research
August 12, 2016
Canada: House prices climbed 2.0% in July

OPINION: In July, the dichotomy in the Canadian home resale market continued, with large monthly gains in the four metropolitan areas (Vancouver, Toronto, Victoria and Hamilton) that have been driving the national index recently. Apart from these four regions, prices have overall been flat over the last 12 months (top chart). Vancouver has been in a league of its own, with monthly price rises above 2% in each of the last six months. That sequence saw a surge in condos prices as well as for other types of dwellings (left panel middle chart). Some observers believe that prices are going to cool in Vancouver based on last July’s 19% drop in home sales on a y/y basis and to the implementation of a 15% property transfer tax on foreigners purchases of residential real estate. However, despite the drop in existing home sales, the Vancouver resale market remains tight (middle chart – right panel). Furthermore, the labour market in Vancouver is red hot, with employment having risen 7.4% on a y/y basis (bottom chart). These two factors provide support to house prices. The story is not solely about alleged foreign capital flows.

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Post Category: Monthly Reports
July 13, 2016
Home Prices Up 2.3% In June

In June, the Teranet–National Bank National Composite House Price Index™ was up 2.3% from the previous month, the largest June increase since the Index began in 1999. Prices were up in 10 of the 11 metropolitan markets surveyed. Gains exceeded that of the countrywide index in six markets: Victoria (4.4%), Halifax (3.7%), Toronto (3.3%), Vancouver […]

Post Category: Research
July 13, 2016
Economic News – Canada: House prices surged 2.3% in June

OPINION: In June, the monthly rise in home prices was the strongest in a decade, with all markets except for Calgary and Edmonton experiencing gains above the historical norm. What is even more striking is that this surge occurred after strong gains in the previous months. As a result, on a year-to-date basis, home prices are already up a whopping 6.8%, well above the historical average of 4.0% for the first six months of the year. On a year-over-year basis, the dichotomy continued in the Canadian housing market with gains for the sub-index which includes Toronto, Vancouver, Victoria and Hamilton accelerating over 16% while deflation persisted in the seven other regions covered (top chart). In regards to the continued strength in Vancouver and Toronto, it’s worth noting that both labour markets are still booming, a sharp contrast with what we observe in the rest of the country (middle chart). Employment at record highs combined with record low supply (bottom chart) and mortgage rates continue to fuel home price inflation in those markets.

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Post Category: News and Press Releases
June 20, 2016
Home price gains cooling but still hit record

Canadian home prices rose to another record high in July but moderating gains provided more evidence that the real estate market is cooling, according to a national benchmark index.

Post Category: Monthly Reports
June 14, 2016
Home Prices Up 1.8% In May

In May, the Teranet–National Bank National Composite House Price Index™ was up 1.8% from the previous month, the largest May increase since 2008. For the first time since June 2013, prices were up on the month in all of the 11 metropolitan markets surveyed. Gains exceeded that of the countrywide index in four of those […]

Post Category: Research
June 14, 2016
Economic News – Canada: House prices up 1.8% in May

OPINION: The dichotomy continues on the Canadian home resale market. Year-over-year price growth exceeds 10% in Vancouver, Victoria, Toronto and Hamilton, while deflation persists in the seven other regions covered (top chart). New trends are also emerging. First, Vancouver is in a league of its own with prices up more than 20% over the last twelve months. Second, the surge in house prices in that city does not anymore mostly characterize single-family homes (price up at a record 25.1% in May) but also condos (prices up 13.9% in May against 6% in January – middle chart). To a lesser extent, this new trend also applies to Toronto. In that city, availability of land had restricted the supply of low-rise residential buildings, and steep house price growth used to be concentrated in that segment. But with record sales of apartments since the beginning of the year, condos prices have moved up in sync with those of other types of dwellings lately (bottom chart). The generalization of steep price growth to condos should feed concerns about affordability in these metropolitan areas and household indebtedness.

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For further information about upcoming reports, please contact:

Kan Zhu
Leader, Data & Advisory Solutions
Teranet Inc.
Phone: 416-360-8863 x 2270
Email:
Michael Pertsis
Director, Mortgage Derivatives
National Bank Financial
Phone: 416.869.7124
Email: