In May the Teranet–National Bank National Composite House Price IndexTM was up 0.5% from the month before, the first monthly gain in nine months. On the other hand, for a month of May it was the smallest rise in 21 years of index history. If seasonally adjusted, the index would have been down 0.4% on […]
One should not rejoice about the first rise in home prices in seven months as May is
historically the second strongest month of the year. In effect, the 0.5% increase
represents the weakest performance on record for a month of May. As a result, the
annual increase moderated to 0.7%, the lowest since the recession (see left chart). While
a combination of stress testing measures, foreign buyer’s taxes and earlier increases in
mortgage rates have contributed to the slowdown, recent data shows that the Canadian
housing market is stabilizing. Home sales increased for a third month in a row in May,
rebounding close to their past ten year average, a development which was made possible
thanks to a booming labour market and a plunge in mortgage rates. In Toronto, both
condos and other dwellings prices showed pullbacks in May but resale market conditions
(see right chart) are not suggestive of a significant deterioration in the coming months
especially since the GTA created a whopping 92K jobs so far this year. The Vancouver
market showed the weakest performance on an annual basis among covered markets (-
4.1%, y/y) but its job market is also firing on all cylinders in 2019 a development that
could have contributed to the strong rebound in resales observed in May (+24%).
In April the Teranet–National Bank National Composite House Price IndexTM was flat from the previous month. Apart from the 2009 recession period, it was the first April in 21 years of index history in which home prices showed no rise. And the run of months with no rise in the composite index has now extended […]
While the Composite Teranet-National Bank HPI dropped again in April, there are signs of stabilization. April’s decline in the Composite index is the smallest in months. The cumulative decline over this seven-month stretch is only 1.8%, a moderate loss compared to the 2008-2009 recession, and even compared to shorter sequences of drops that occurred since then (left chart). The moderation of the recent price decline at the national level is partly due to Toronto, where the index edged down only 0.2% over that seven-month period. The resilience of the home resale market in the largest urban area in Canada is due to the performance of the condo segment, where the index was up 2.1% over the period (right chart). Judging from the active-listings-to-sales ratio, market conditions on the condo market have been tight over the last three years, suggesting that the upward trend in condo prices in Toronto is unlikely to be interrupted in the near future.
In March the Teranet–National Bank National Composite House Price IndexTM was down 0.3% from the previous month. Apart from the recession year 2009, it was the first March decline in the 20 years of index history. It was also the sixth consecutive monthly decline, for a cumulative drop of 1.7%. Indexes were down on the […]
In March, the downward trend in home prices continued with the Composite Teranet-National Bank HPI slipping for a sixth month in a row, a first in six years. Moreover, in 20 years of history, this is the first time that the Composite HPI drops in a month of March outside a recession. A few months ago, the home price weakness was mainly noticeable in the westernmost metropolitan areas. Judging from the six-month change in the index, it now extends to nine of the 11 regions comprising the Composite index, the exceptions being Montreal and Halifax. If we also consider 14 other metropolitan regions for which a Teranet-National Bank HPI is computed (although not included in the Composite), we have a price increase in only six of the 25 metropolitan regions considered. This is one of the lowest diffusion of 6-month price gains in March over the history of the index. Home prices are adjusting to the recent rise in interest rates and stricter mortgage qualification rules. But price weakness does not mean collapse. In Toronto, Canada’s largest real estate market, apartment prices have been up for 17 consecutive months, while prices of other types of dwellings declined only 1.4% over the last 6 months. In Vancouver, the most expensive market, employment growing 2.9% in Q1 on a y/y basis should limit further home price declines.
In February, the downward trend in home prices continued with the Composite Teranet-National Bank HPI slipping for a fifth month in a row (left chart). Moreover, the weakness extended to most regions. In the 11 metropolitan areas comprised in the Composite Index, only one (Montreal) experienced an increase of the index over the last six months. Among the 14 other metropolitan areas for which we have a HPI, only London and Windsor did so. This was the lowest diffusion of six-month gains in ten years for a month of February (right chart). Home prices are adjusting to the recent rise in interest rates and stricter mortgage qualification rules. But price weakness does not mean collapse. In Toronto, Canada’s most important real estate market, apartment prices have been up for 16 consecutive months, while prices of other types of dwellings declined only 1.2% over the last 6 months. In Vancouver, where employment was up 3.1% on a y/y basis in February, seasonally adjusted home sales stabilized in the beginning of the year, limiting the potential of further home price declines.
In February the Teranet–National Bank National Composite House Price IndexTM was down 0.4% from the previous month. Except for the recession year of 2009, it was the largest February decline in 19 years of index history. Indexes lost ground in nine of the 11 metropolitan markets of the composite index: Victoria (−2.0%), Hamilton (−1.4%), Quebec […]
In January, the downward trend in home prices intensified in Western Canada’s three
largest metropolitan areas. The indexes for Vancouver, Calgary and Edmonton extended
what are now the longest runs of months without an increase among the 11 metropolitan
areas covered by the national index. It was a seventh month without an increase in
Calgary, a sixth one in Vancouver and a fifth one in Edmonton. Home prices have been
trending down in three of the past four years in Calgary and Edmonton while Vancouver
shows no growth for the first time in six years (left chart). In City of Calgary, the listingsto-
sales ratio was the highest for a month of January since 2014 (right chart) – the year
when the oil price collapse occurred. Both Calgary and Edmonton are facing an outsized
number of vacant new dwellings and continued price weakness. In Vancouver, where
home sales have weakened in recent months, things appear to be stabilizing. After
seasonal adjustment, Vancouver home sales indeed stabilized when compared to
December. Solid labour markets in Greater Vancouver, where a near-record 72K jobs
were added in the last six months, argue for a more stable listings-to-sales ratio and
limited price deflation.
In January the Teranet–National Bank National Composite House Price IndexTM was down 0.1% from the previous month. It was the fifth consecutive month without a rise, the longest such run since March 2013, and was notable for marked retreats in the three largest markets of Western Canada: Edmonton (−0.8%), Calgary (−0.5%) and Vancouver (−0.3%). The […]