News and Press Releases

In August, the Teranet-National Bank HPI saw record 12-month growth of 18.4%. This past year has been characterized by widespread price increases in the regions covered by the index. Indeed, prices were up 10% or more in 87% of the 32 urban markets surveyed. In addition, price growth was up 30% or more in 45% of markets. However, this dizzying growth in major urban centers hides a very different dynamic when analyzing the month-over-month variations. In fact, using the unsmoothed composite HPI adjusted for seasonal effects, there have now been five consecutive months in which the monthly increase in prices has been lower than in the previous month. From July to August, prices even remained essentially unchanged (+0.1%). This stagnation coincides with a decrease in activity in the resale market, which is potentially being held back by affordability issues after the staggering price increases. Indeed, home sales have been declining month-to-month for five months now. However, we do not see prices decreasing in the short term as the level of sales remains high on a historical basis and the inventory of properties for sale remains very low.

September 2021

In July, the Teranet-National Bank HPI was up 2.0% compared to the previous month. While this is still very robust growth, it is now the second consecutive month that the monthly price increase is lower than the previous month. This slowdown coincides with a decrease in activity in the resale market. In fact, home sales have been decreasing for four months in a row now. With this moderation in sales seemingly well underway, price growth may continue to slow in the months ahead. However, the real estate market continues to be strong on a historical basis, so we do not see prices decreasing in the near term, even though the gains over the past year are staggering. Indeed, the composite index continues to break records, recording 17.8% year-over-year growth in July. The recent records are characterized by widespread price increases across the regions covered by the index. Indeed, prices were up 10% or more from the same period last year in 87% of the 32 urban markets surveyed. In addition, price growth was up 30% or more in an unprecedented 48% of markets.

August 2021

In June the Teranet-National Bank HPI was up 16.0% from a year earlier, the largest 12-month gain on record. The record is the more impressive for beating the 14.2% rise of June 2017, which preceded the coming into effect of macroprudential measures to restrain home prices. At that time the price rises were concentrated in the markets of Vancouver and the Golden Horseshoe region including Toronto and Hamilton. This month’s new record is based on countrywide rises across the regions covered by the index. Prices were up 10% or more in an unprecedented 90% of the 32 urban markets for which an index exists and 30% or more in an equally unprecedented 42% of these markets. The June monthly gain of 2.7% in the national composite index was its 20th consecutive monthly rise and the second largest since the beginning of the index in 1999. However, it was the first deceleration from the month before (May rise 2.8%) since January. This cooling coincides with a slowing of growth in existing home sales – their number declined in June for a third straight month. The moderation of the pace of sales could mean a slowing of price rises in the coming months. However, since the market remains vigorous by historical standards, we do not anticipate a decline of prices in the near term.

July 2021

The Teranet-National Bank HPI jumped 2.8% in May to an all-time high. It was the 19th straight monthly increase and the largest ever since the index began in 1999. Its recent vigour coincides with historically high numbers of home sales in most regions of Canada, combined with limited supply. Market conditions accordingly remain very much in favour of sellers and price growth. After seasonal adjustment the monthly jump of the unsmoothed HPI was slightly smaller at 2.1%, bringing the unsmoothed index to a spectacular cumulative gain of 17.0% since last June. Home price growth remained rapid in the great majority of Canadian cities: June prices were up 10% or more from a year earlier in an unprecedented 90% of the 32 urban markets surveyed and by 30% or more in 42% of those markets. The 12-month price growth for single-family homes continues to outpace that of the condo segment. The latter continues to lag as buyer preferences shift from small dwellings in city centres to larger homes in the suburbs. This divergence may not last long, as affordability has decreased in the non-condo segment.

June 2021

The Teranet-National Bank HPI jumped 2.4% in April to a new all-time high. This marks 18 straight monthly increases. Its recent vigour coincides with historically high numbers of home sales in most regions of Canada, coupled with limited supply. As such, market conditions remain very much in favour of sellers and consequently price growth. After seasonal adjustment the monthly jump of the unsmoothed HPI was slightly weaker – 2.0%, bringing the unsmoothed index to a whopping cumulative gain of 14.3% since last June (left chart). The rapid pace of home price growth continues in the great majority of large Canadian cities, with prices up 10% or more from a year earlier in an unprecedented 87% of the 32 urban markets surveyed (right chart). It should be noted that annual price growth for single-family homes continues to outpace the condo segment. The latter continues to lag as the shift of preferences has tilted buyers from small dwellings in city centers to larger homes in the suburbs. This divergence may not last for long as mortgage interest rates have increased, and affordability has deteriorated in the non-condo segment (link).

May 2021

The Teranet-National Bank HPI jumped 1.5% to a new high in March, its 17th straight monthly rise. Its recent vigour coincides with historically high numbers of home sales in most regions of Canada, coupled with limited supply. The monthly jump of the unsmoothed HPI was even bigger – 2.7%, the most of any month since July 2006, taking the unsmoothed index to a cumulative rise of 11.9% since last June. The rapid rise of home prices continues in the great majority of large Canadian cities, with prices up 10% or more from a year earlier in an unprecedented 81% of the 32 urban markets surveyed. However, the magnitude of the price rise varies with category of dwelling. In the main metropolitan markets the rise was much smaller for the condo segment than for single-family homes. Among the reasons for the difference is a shift of preferences away from small dwellings in city centres toward larger homes in suburbs.

April 2021

The Teranet-National Bank HPI rose to a new high in February. Its 0.5% gain from January was its 16th consecutive monthly rise. This recent vigour coincides with historically high numbers of home sales in most regions of Canada, coupled with limited supply. As a result, prices were up 10% or more from a year earlier in an unprecedented 77% of the 32 urban markets covered. However, the magnitude of the price rise varies with the category of dwelling. In the largest metropolitan markets, the rise was much smaller for the condo segment than for single-family homes. Among the reasons for this difference is a shift of preferences away from small dwellings in city centres toward larger homes in suburbs. Apart from the pandemic factor, there is reason to believe the condo segment is feeling the effect of low immigration inflows and persistently high unemployment among young workers.

March 2021

The Teranet-National Bank HPI rose 0.3% in January, reaching an all-time high. The new record coincides with a historically high volume of home sales in most regions of Canada, coupled with limited supply. The seasonally adjusted unsmoothed Composite HPI has surged 7.8% since July. However, the uptrend of home prices does not encompass all categories of dwellings. In Toronto, the rise in sales volume was concentrated in single-family dwellings outside the downtown area, and did not take in condos. In the Greater Montreal market, a very large rise in condo listings on Montreal Island contrasts sharply with the peripheral areas of that market. In the Greater Vancouver and Victoria markets, as in Toronto and Montreal, price increases for single-family homes have significantly outpaced those for condos. Apart from a shift in preference induced by the pandemic, there is reason to believe the condo segment is affected by low immigration inflows and a persistently high unemployment rate among young workers.

February 2021

The Teranet-National Bank HPI rose 0.6% to a new high in December. This record coincides with a historically high volume of home sales in most regions of Canada coupled with limited supply. The seasonally adjust unsmoothed Composite HPI has surged 6.8% since July. However, December was the second consecutive month in which index growth was slower than the month before. Moreover, the uptrend of prices did not apply to all categories of dwellings. In Toronto, the rise in sales volume was concentrated in single-family dwellings outside the downtown, not in condos. In the Greater Montreal market, a very large rise in condo listings on Montreal Island contrasted sharply with the peripheral areas of that market. In Greater Vancouver and Victoria, price increases for single-family homes also far outpaced those for condos. Apart from a shift in preference induced by the pandemic, there is reason to think the condo segment is affected by low immigration inflows and a still-high unemployment rate among young workers.

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Teranet-National Bank Composite HPI registered a record monthly gain for the month of November, as it did in October. This performance coincides with the persistence of historically high home sales in many regions in Canada in conjunction with a low supply. Since July, the seasonally adjusted unsmoothed Composite HPI surged 6.3%. That being said, the upward trend in Canadian home prices does not apply
everywhere to all categories of dwellings. In Toronto, the rise in sales was mostly concentrated outside downtown in ground-level dwellings, at the expense of apartments. As for Greater Montreal, the Quebec Professional Association of Real Estate Boards reported a very significant increase in active listings for condominiums on the Island of Montreal, a sharp contrast with the other areas of that region. In Greater Vancouver and Victoria too, price increases of ground-level dwellings are outpacing that of apartments. The outlook for that segment of the market is most impacted by immigration flows and the still-elevated unemployment rate among young workers, that is, potential first-time home buyers.

November 2020