The latest reading of the Teranet-National Bank National Home Price Index shows some key trends for Canadian home prices.
The index gained just 0.1% in September, half of the 21-year average for the month, continuing the trend of the last few months. Even if it were seasonally adjusted, the index would have gained, as in August.
The Composite 11 index’s growth was stymied by declines for Quebec City (−0.7%), Vancouver (−0.5%) and Victoria (−0.3%) while Edmonton and Halifax were flat.
There were gains for Toronto (0.1%), Hamilton (0.1%), Calgary (0.2%), Winnipeg (0.6%), Ottawa-Gatineau (0.8%), and Montreal (1.0%). Most of these markets have been rising for much of 2019.
The index is based on percentage increases from a base level of 100 set in June 2005 and the current 227.72 reading means prices are up more than 227% since that date.
Western markets decline
The 12-month data shows that, at 0.7%, the index was well-below inflation but gained pace for the second consecutive month.
Western markets are weighing on the 12-month figure with declines for Vancouver (down 7.1% from a year earlier), Edmonton (−3.1%), Calgary (−1.9%) and Victoria (−0.1%). The index for Quebec City was essentially flat from a year earlier.
Meanwhile, there were gains in the 12-month stats for Winnipeg (0.5%), Toronto (4.0%), Hamilton (4.3%), Halifax (5.8%), Montreal (6.3%) and Ottawa-Gatineau (7.1%).
Analysis of the results from National Bank’s senior economist Marc Pinsonneault suggests that the declining prices in Vancouver could begin to improve.
“Seasonally adjusted or not, home prices continue to decline in Vancouver. But home sales in Vancouver have recovered strongly since their March trough. Over the period, conditions on the home resale market turned from “favorable to buyers” to “balanced”. This suggests that home price deflation should fade over the next few months in Vancouver,” the report says.
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