MONTREAL, QC – National Bank and Teranet are pleased to announce the expansion of the Teranet – National Bank House Price Index™ to five additional metropolitan areas. House price indices will now also be available for Edmonton, Hamilton, Québec, Victoria and Winnipeg as early as October 26, 2011.
Combined with the current Canadian metropolitan areas covered by the index, Calgary, Halifax, Montreal, Ottawa (now Ottawa-Gatineau), Toronto, and Vancouver, the aggregate value of occupied dwellings in the metropolitan area covered by the indices now represents 64% of the Canadian aggregate value.
The new metropolitan area indices will be combined with the current six cities to form the Teranet – National Bank Composite 11 House Price Index™. The existing composite index will still be available and renamed the Teranet – National Bank Composite 6 House Price Index™. Other changes to the index include minor adjustments to align the geographical areas with Statistics Canada’s Census Metropolitan Area definitions.
The Teranet – National Bank House Price Index™ is an independent, transparent and verifiable representation of the rate of change of Canadian single-family home prices. The measurements are based on the property records of public land registries, where sale price is available. The monthly indices cover 11 Canadian metropolitan areas: Calgary, Edmonton, Halifax, Hamilton, Montreal, Ottawa-Gatineau, Québec, Toronto, Vancouver, Victoria, and Winnipeg. Indices are published monthly on www.housepriceindex.ca. Since its launch in December 2008, the index has steadily gained acceptance on a path to becoming a Canadian benchmark. It is now perceived by many as the most accurate measure of change in Canadian house prices.
“Since the very first index publication month, there has been demand for additional coverage. We are pleased to fulfill this demand,” said Simon Côté, Managing Director – Risk Management Solutions at National Bank. “The current phase of index development is one step towards providing a more complete reference measure for an asset class with an aggregate value surpassing the Canadian stock market.”
“We are encouraged by the positive response received from banks and other Financial Services customers as we bring the expanded index to the market,” added Eduardo Alzamora, Director, Financial Services at Teranet. “We are also excited by the possibilities our customers see in using the index to directly support their business needs. The Composite 11 index is a perfect compliment to our suite of solutions that assist lenders and others in the Canadian mortgage industry mitigate collateral risk.”
The Teranet – National Bank House Price Index is based on the “repeat sales methodology,” which is widely accepted as the most reliable and robust approach for tracking the housing market. In fact, this same methodology is used for the house price benchmark index in the United States. To be included in the calculation, properties must have been sold at least twice. The two prices are used to measure the increase or decrease in property value in the period between the two transactions.
The index is published monthly on the last Wednesday of each month at www.housepriceindex.ca. Indices are published 60 days after transactions are registered. The actual and historical values of the index, as well as a description of the methodology, are also available on this site.
The report can be accessed at www.housepriceindex.ca
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 eleven metropolitan areas: Victoria, Vancouver, Calgary, Edmonton, Winnipeg, Hamilton, Toronto, Ottawa-Gatineau, Montréal, Québec City and Halifax. The national composite index is the weighted average of the eleven metropolitan areas. The weights are based on aggregate value of dwellings as retrieved from the 2006 Statistics Canada Census. According to that census, 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.