News and Press Releases

Home prices weakened in the second half of 2018 in most of the metropolitan areas
constituents of the Teranet-National Bank Composite HPI. The Calgary index did not rise
for a sixth month in a row in December. It was a fifth month in a row for Vancouver, and
a fourth one for Edmonton. Weakness became apparent in Q4 for six other metropolitan
areas, when only Montreal and Ottawa-Gatineau experienced home price growth (left
chart). This is the worst 3-month diffusion for December in five years. This conclusion
still holds If we also include in the sample 14 other Canadian metropolitan areas for
which a Teranet-National Bank HPI is available (although not integrated in the national
composite index) – right chart. Higher mortgage rates and tougher qualification rules are
causing the cooling in most major home resale markets in Canada. The recent increase
in vacant new dwellings may also add to downward price pressure in some markets. At
this juncture, we continue to expect a soft landing of the Canadian home resale market.

.January 2019

The Composite 6, which was first launched in December 2008 was initially built to capture the aggregate performance of the Canadian housing market with the richest available data at that time. In 2011, we expanded the Composite 6 by five new cities and reviewed and refined the geographic territory of each city to better align with the Census Metropolitan Area definitions provided by Statistics Canada. The Composite 11 was built with this information in hand and more precisely reflects the rate of change of single-family home prices in Canada.

As a result, the last public report that will contain the Composite 6 index (C6) data will be March 13^th, 2019.  After this date, only Composite 11 will be made available in the public sphere. If you still require the Composite 6 data, it will be available as a commercial offering. You can contact us to discuss options to continue receiving the data. If you have any questions or concerns, please reach out to us at info@housepriceindex.ca

Home price weakness in some major metropolitan areas is evidenced by a second
consecutive decline in the national Composite Index. In the most expensive markets,
new mortgage qualification rules and the rise in interest rates have cooled demand
significantly. For instance, in Vancouver, November was a fourth month in a row without
a rise in home prices, for a cumulative drop of 1.8%. In Toronto, prices declined over the
last three months, for a total loss of 0.4%. Markets are also weak in Alberta, where prices
did not rise for a fifth month in a row in Calgary, and for a third consecutive month in
Edmonton (left chart), for cumulative declines of 1.4% and 1.3% respectively. There are,
however, some areas of strength in the country. In Montreal, for example, home sales
are at a record level so far in 2018 (right chart). With interest rates set to rise more
slowly than previously thought, hopes for a soft landing of the Canadian home resale
market are still warranted.

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

December 2018

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

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

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

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…)

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

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