Post Category: News and Press Releases
November 15, 2018
Home prices fall in October

Home prices are showing signs of weakness at the national level (left chart), but the
market is far from being homogeneous. For example, Vancouver showed no gain for a
third month in a row, for a cumulative loss of 1.2%. Moreover, the weakness extends to
condos as well as to more expensive dwellings. This is consistent with the fact that since
the beginning of the year, home sales declined markedly in both segments. For Toronto,
the picture is mixed, with condos prices still remaining on an upward trend. Montreal is
at the other end of the spectrum. The second largest metropolitan region in Canada
enjoyed the most vigourous home resale market over the last few months (right chart).
But with interest rates set to rise again in the coming months, we don’t see much upside
for home prices.

To read the full report, please click on the link below:

November 2018

Post Category: News and Press Releases
October 12, 2018
Weakness in Vancouver and Calgary

When seasonal effects are removed, the Composite price index edged up in September, recovering some of the ground lost in previous months. While this applies in particular to Toronto, it is not the case for Vancouver and Calgary, where the seasonally adjusted indices extended a string of declines (left chart). This downtrend in home prices is consistent with the weakness in home sales reported by the respective real estate boards of these two metropolitan areas. At the opposite, seasonally adjusted indices extended a string of solid increases over the last few months in Montreal and Ottawa-Gatineau (right chart). Again, this is consistent with the performance of the home resale market. In Montreal, home sales in September were up 8% from a year ago and at their highest level for a month of September in 9 years. In Ottawa-Gatineau, the market is almost in the “favorable to sellers” territory judging from the new-listings-to-sales ratio.

The attached report along with selected research from the Economics and Strategy Group can also be accessed by clicking the link below:

October 2018

Post Category: News and Press Releases
September 12, 2018
Weakness in Toronto and Vancouver

OPINION: The published Composite index rose in August for a fifth month in a row, but these rises
only reflect usual seasonal patterns over this time of the year. Indeed, after seasonal
adjustment, the Composite index was actually flat in August after drops in June and July.
So, at the national level, the national market is certainly not displaying underlying
strength. This is mostly a reflection of Toronto and Vancouver, the two most important
real estate markets in Canada. The published index for Toronto showed a fifth monthly
increase in a row, but its seasonally adjusted counterpart displayed the opposite with
five consecutive declines. In Vancouver, the seasonally adjusted index was down for a
third month in a row (left chart). In August, seasonally adjusted indices declined or were
flat in six of the nine other metropolitan regions covered. That being said, there are
areas displaying underlying strength, such as Montreal and Ottawa-Gatineau, whose
indices recorded a string of unusually large increases over the past few months

To read the full report, please click on the link below:

September 2018

Post Category: News and Press Releases
August 14, 2018
Neither strength nor deep weakness

OPINION: The Composite index rose in July for a fourth month in a row, but these rises were all
below the historical average for these months. Indeed, after seasonal adjustment, the
Composite index was flat in July after a drop in June. The same phenomenon applied to
the Toronto index, where at the opposite of the published index, the adjusted index
declined over the last four months (left chart). The adjusted index declined over the last
two months in Vancouver. This means that the recent rises in these indices reflected
only seasonal pressures, not an underlying trend. For Toronto, the recent declines in the
seasonally adjusted index were due to the sub-index for dwellings other than condos,
down a cumulative 2.1%. Meanwhile, the condo index was up 1.6% (right chart). These
numbers are consistent with market conditions, tighter for condos than for other
housing.

To read the full report, please click on the link below:

August 2018 (more…)

Post Category: News and Press Releases
July 12, 2018
In June, the index recovered the ground lost in H2 2017

OPINION: With June’s rise, the Composite Index just recovered the ground lost during H2 2017 (left
chart). Does this mean that the Canadian home resale market is about to enter into a
new frenzy? No. June’s rise in the index, impressive at first sight, was in fact weak for
this time of the year. Indeed, if the Index were purged from seasonal patterns, it would
have been about flat over the last three months (right chart). This means that apart from
seasonal patterns, the index merely stabilized lately. That being said, stabilization at a
high level might hide different price trends for different types of dwellings. Condo prices
have risen at a fast clip since the beginning of the year in Toronto and Vancouver (after
seasonal adjustment, 7.8% and 16.3% annualized respectively), while prices for other types
of dwellings held their ground. The resiliency of prices for the latter category of dwellings
is indeed reassuring in view of higher interest rates and stricter mortgage qualification
rules (B20) that dampen demand for the most expensive categories of dwellings.

To read the full report, please click on the link below:

June 2018

 

Post Category: News and Press Releases
June 13, 2018
Teranet-National Bank HPI: The stabilization of home prices confirmed in May

OPINION: May’s rise in the Teranet-National Bank HPI confirmed the stabilization of home prices that took place since the end of last year, following a correction in H2 2017 (top chart). It is true that this stabilization was accompanied by a shift of price momentum in favor of condos in Toronto and Vancouver. Given the high price level for other types of dwellings in these cities, rising interest rates and tighter mortgage underwriting standards, this shift should not be surprising.  But fortunately, it did not result in an outright price decline for other types of dwellings in these cities (middle chart). In other regions covered by the Composite index, prices have regained most of the ground lost in Q1 (bottom chart). Given that interest rates are likely to continue to increase, a relapse of home prices over the next few quarters cannot be ruled out. But their resilience so far suggests that price declines would then be limited in scope.

To read the full report, please click on the link below

May 2018

Post Category: News and Press Releases
May 14, 2018
Moderate rise in the Composite Index in April

OPINION: After a difficult H2 2017, the Composite Index has stabilized in recent months (top chart). Moderate rises will likely continue to characterize the Composite index over the coming months, as conditions in the two major constituent home resale markets, Toronto and Vancouver, are now balanced (current active-listings–to-sales ratios close to their long-term average). Let’s recall that over the last two preceding years, conditions in both markets were very tight, triggering double-digit percentage increases in the Composite index on a y/y basis. We do not think that market conditions will deteriorate significantly from now on in both markets, as sales seem to have stabilized lately

201804 Report

Post Category: News and Press Releases
April 12, 2018
Composite Index flat in March

OPINION: Without Vancouver, the Composite Index would have declined in March and in 5 of the 6 preceding months (top chart). Speaking of Vancouver, inferring from Real Estate Board of Greater Vancouver data, seasonally adjusted home sales have declined markedly over the last two months and the listings-to-sales ratio, while still in the sellers’ market territory, moved close to the balanced market boundary (middle chart). This should translate into moderate increases in Vancouver’s Index over the next few months. Apart from Vancouver and Victoria, March indices were below their recent peak in all regions, but the decline was the most obvious in Toronto (-7.3% since last July). This drop was likely triggered by Ontario’s implementation of the 15% Non-
Resident Speculation Tax followed by stricter rules for qualification for a mortgage (B20) and a rise in mortgage rates. As a result, Toronto monthly seasonally adjusted home sales, which had averaged more than 9,000 units over the previous 24 months, fell to less than 7,000 units on average since last May (bottom chart). Following this change in home sales pace, Toronto home resale market turned from very tight to balanced. With the two most important Canadian markets now in balanced territory or nearing it, a soft landing is the most likely outcome for the Canadian residential market.

To read the full report, please click on the link below

Mar 2018_EN

Post Category: News and Press Releases
March 14, 2018
Composite Index relapsed in February

OPINION: The Composite Index relapsed in February, having lost ground in four of the last six months, for a cumulative drop of 1.9%. Moreover, over that period, indices declined in seven metropolitan regions out of 10. Excluding Vancouver, the Composite Index would have declined or stayed put in each of the last six months. Speaking of Vancouver, we estimate that home sales declined markedly in February. Therefore home price pressures may fade out in that area over the next few months, even if for the moment the home resale market remains tight. For Toronto, home sales declined in January and February after a rush in Q4. In February, we estimate that sales were at their lowest seasonally adjusted level since July 2010, with the active-listings-to-sales ratio indicating a 3- month supply, the highest since November 2012 and comfortably in the balanced territory. It therefore seems that the new stricter bylaws on qualification for uninsured mortgages together with increased interest rates are taking a bite at least in the two most unaffordable large markets in Canada.

To read the full report, please click on the link below

Feb 2018 TNB Monthly Commentary

Post Category: News and Press Releases
January 12, 2018
Vancouver the main driver of the Composite in December

OPINION: Without Vancouver, the Composite index would have declined for a fourth month in a row (top chart). The strength of Vancouver’s index is consistent with continued tight home resale market conditions. Toronto’s index declined for a fifth consecutive month, but the unsmoothed index (see note on methodology on next page) rose for a second month in a row (middle chart). Unless the unsmoothed index relapses in January, the sequence of declines in the smoothed index should then be interrupted. However this improvement is likely to prove temporary, as it might have resulted from buyers rushing to avoid the new bylaws on qualification for an uninsured mortgage (implemented in January 2018). This view is supported by the increase in Toronto home sales in November and December compared to previous months (bottom chart). Therefore, a resumption of the downward price trend early this year cannot be excluded.

Please click on the link below to access the full report:

201712 TNB monthly commentary

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: