In April the Teranet-National Bank National Composite House Price Index™ was up 0.5% from the previous month, following a flat March. Though the gain might appear robust, it must be said that apart from the recession in 2009, the composite index always advanced in April, the average monthly increase having been 0.9%. Last month's advance is indeed the third weakest for April outside a recession since 1999. Though the countrywide composite index rose to an all-time high, only four of the 11 metropolitan markets surveyed did the same. Prices were up from the previous month in nine markets. Calgary's 1.5% advance was the third in a row exceeding 1%, taking that market to a new high. Montreal's monthly gain of 0.8% was far from making up the ground lost in March. Prices in Hamilton, Halifax and Ottawa-Gatineau were up 0.7% on the month. The rise in the national capital region ended a run of seven monthly retreats. The rise in Halifax left its index still below the January reading. The monthly gain was 0.6% in Edmonton, 0.5% in Vancouver (the only city whose prices have risen for 12 consecutive months, also to a new high), 0.4% in Winnipeg and 0.3% in Toronto. These last two markets reached new highs although their advances trailed the countrywide average. Two markets were down from the previous month, Quebec City (−0.5%) and Victoria (−1.0%).
Teranet – National Bank National Composite House Price Index™
Since in April 2013 the monthly rise of the composite index was the smallest on record (+0.2%), the rather modest advance of April 2014 resulted in an acceleration of 12 month home price inflation to 4.9% from 4.6%. However, for the first time since October 2010, prices were down from a year earlier in five of the 11 markets, including all four of those east of Toronto: Halifax (−3.5%), Quebec City (−2.4%) and Montreal and Ottawa-Gatineau (−0.4%). The fifth market with 12-month deflation was Victoria (−0.7%). In striking contrast were 12-month gains of 10.0% in Calgary and 9.0% in Vancouver. Toronto (+5.8%) and Hamilton (+5.3%) also pulled the cross-country average higher. Trailing the average were Edmonton (+4.0%) and Winnipeg (+2.5%). The softness of prices east of Toronto is consistent with the excess supply prevailing in the resale markets of these metropolitan areas.
Teranet – National Bank House Price Index™
The historical data of the Teranet – National Bank House Price Index™ is available at www.housepriceindex.ca.
|Metropolitan area||Index level|
|% change m/m||% change y/y|
|Calgary||179.39||1.5 %||10.0 %|
|Edmonton||174.88||0.6 %||4.0 %|
|Halifax||137.75||0.7 %||-3.5 %|
|Hamilton||145.92||0.7 %||5.3 %|
|Montreal||148.37||0.8 %||-0.4 %|
|Ottawa||139.49||0.7 %||-0.4 %|
|Quebec||172.74||-0.5 %||-2.4 %|
|Toronto||155.15||0.3 %||5.8 %|
|Vancouver||180.52||0.5 %||9.0 %|
|Victoria||133.88||-1.0 %||-0.7 %|
|Winnipeg||196.00||0.4 %||2.5 %|
|National Composite 6||160.94||0.6 %||5.5 %|
|National Composite 11||161.28||0.5 %||4.9 %|
The Teranet–National Bank House Price Index™ is estimated by tracking observed or registered home prices over time using data collected from public land registries. All dwellings that have been sold at least twice are considered in the calculation of the index. This is known as the repeat sales method; a complete description of the method is given at www.housepriceindex.ca
The Teranet–National Bank House Price Index™ is an independently developed representation of average home price changes in six metropolitan areas: Ottawa, Toronto, Calgary, Vancouver, Montreal and Halifax. The national composite index is the weighted average of the six metropolitan areas. The weights are based on aggregate value of dwellings as retrieved from the 2006 Statistics Canada Census. According to that census1, the aggregate value of occupied dwellings in the metropolitan areas covered by the indices was $1.168 trillion, or 53% of the Canadian aggregate value of $2.207 trillion.
All indices have a base value of 100 in June 2005. For example, an index value of 130 means that home prices have increased 30% since June 2005.
Economics and Strategy Group
National Bank of Canada
Teranet - National Bank House Price Index™ thanks the author for their special collaboration on this report.