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Canada: Home Price Inflation Decelerates To 5.9% In April

ByThe National Bank of Canada
Published 05/31/2012, 06:59 AM
Updated 05/14/2017, 06:45 AM
IMOB
0.06%
FACTS:

On a y/y basis, the Teranet–National Bank National Composite House Price IndexTM rose 5.9% in April (top chart), a deceleration from March’s print of 6.0%. By metropolitan areas, 12-month price changes vary widely: 10.1% in Toronto, 6.6% in Winnipeg, 5.9% in Hamilton, 4.9% in Montreal and Vancouver, 4.8% in Halifax, 4.2% in Ottawa-Gatineau, 3.9% in Quebec City, 1.9% in Calgary and Edmonton and -1.8% in Victoria. On a seasonally-adjusted basis, the Composite monthly growth was 0.6% in April. Prices were up from March in eight of the 11 metropolitan areas covered: Toronto (1.0%), Calgary (0.9%), Halifax (0.8%), Montreal (0.5%), Edmonton and Winnipeg (0.4%), Ottawa-Gatineau and Vancouver (0.3%). Seasonally-adjusted prices declined in three metropolitan areas, namely Victoria and Quebec City (-0.2%) and Hamilton (-0.5%).

Canada House prices rose 5.9 in April a yy basis
OPINION: On a seasonally adjusted basis, the monthly rises in the Composite index since the beginning of the year have been surprisingly large. But the Toronto market, accounting for more than a third of the Composite Index and where monthly price increases printed 0.9% or more in each month so far this year, can be designated as the culprit. When Toronto is excluded from the seasonally adjusted Composite, recent monthly price increases are consistent with a national balanced market for existing homes (middle chart), precisely the situation depicted by Canadian Real Estate Association data on sales and new listings (bottom chart). From now on, the Toronto condo market deserves particular attention, as it appears to be running ahead of fundamentals.
Excluding Toronto, recent price changes
are consistent with a balanced existing homes market

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