Vancouver, Victoria and Montreal were the only metropolitan areas in Canada whose house price indexes rose to a new high in May, according to Teranet’s latest report.
The Teranet–National Bank National Composite House Price IndexTM rose by 1.0% compared to April, largely led by the condo market. On the downside, price growth in Canadian real estate decelerated for the longest period since 2008.
How is the Teranet house price index calculated?
The Teranet-National Bank House Price Index™ is calculated by collecting data from the public land registry, on registered home prices over time. Since it considers all sales, including sales which were not registered on Centris, it provides a highly accurate overview of price changes. Eleven metropolitan areas are used in the index: Victoria, Vancouver, Calgary, Edmonton, Winnipeg, Hamilton, Toronto, Ottawa-Gatineau, Montréal, Québec City, Halifax. The published indexes of the 11 metropolitan markets entering into the Teranet–National Bank Composite House Price Index™ are moving averages of the last three months of raw indexes, a procedure that smooths out month-to-month fluctuations. All indices are calculated from the base value of 100 in June 2005. Therefore, an index value of 130 means that home prices have increased 30% since June 2005.
Price growth has been decelerating for the longest period since 2008.
Teranet’s May composite recorded quite a large jump in May. Home prices across the country rose by 1.02% from the month before, pushing prices up by 4.48% year over year. That being said, price growth has been decelerating for 11 consecutive months, which is the longest stretch of deceleration since the Great Recession.
Price growth trends per metropolitan area
The monthly advance was led by:
- Victoria (1.8%)
- Ottawa-Gatineau (1.7%)
- Toronto (1.3%)
- Winnipeg (1.3%) and
- Vancouver (1.0%)
Toronto’s index stayed on par with its historical average in May.
In Ottawa-Gatineau, the index was not enough to make up its cumulative decline over the previous four months.
Small monthly advances were recorded in:
- Edmonton (0.7%)
- Quebec City (0.6%)
- Hamilton (0.4%)
- Calgary (0.4%) and
- Montreal (0.3%)
The index for Halifax remained flat.
In Montreal’s real estate market, existing-home sales from January until May were the best in eight years for those months.
Composite House Price Index per metropolitan area
Due to a rapid advance from May to August of 2017, the composite index is up 4.5% compared to May 2017. However, it is the smallest 12 month rise since June 2015, and the 11th consecutive deceleration from June 2017.
- Vancouver (15.4%)
- Victoria (10.3%)
- Ottawa-Gatineau (3.9%)
- Halifax (3.9%)
- Montreal (2.1%)
- Winnipeg (1.9%)
- Quebec City (1.8%)
|Metropolitan area||Index Level||% change m/m||% change y/y||From peak||Peak date|
|Composite 11||221.73||1.02||4.48||-0.60||Aug 2017|
|Québec City||180.19||0.61||1.86||-1.85||Nov 2017|
This article, Teranet May 2018: Home Prices Stabilize Across Canada, Gains in Montreal, appeared first on Shupilov News.