Investing.com - Financial Markets Worldwide

Canada: House Prices Down 0.2% in November

ByThe National Bank of Canada
Published 01/26/2012, 04:17 AM
Updated 05/14/2017, 06:45 AM
IMOB
-0.47%
FACTS:

The Teranet–National Bank National Composite House Price IndexTM declined 0.2% in November after having been flat in the two previous months. Prices dropped in 8 of the 11 metropolitan areas covered. They were down markedly in Calgary (-1.6%) and Victoria (-0.9%) and moderately in Hamilton (-0.3%), Vancouver, Toronto, Ottawa-Gatineau, Quebec City (-0.2%) and Winnipeg (-0.1%). Prices were up 0.5% in Halifax, 0.4% in Montreal and 0.1% in Edmonton. On a y/y basis, home price inflation was 7.2% in November, a slight acceleration from October. By metropolitan areas, 12-month price changes vary widely: 10.8% in Toronto, 9.1% in Vancouver, 7.5% in Winnipeg, 7.2% in Montreal, 6.0% in Quebec City, 4.4% in Hamilton, 4.2% in Ottawa-Gatineau, 2.8% in Halifax, 1.0% in Hamilton and 0.5% in Calgary.

OPINION: The current period of softness in house prices follows a few months of above-normal increases. This is the same pattern as the one that occurred from April 2010 to November 2010 (middle chart), which ended in a limited price correction. For sure, according to the Canadian Real Estate Association, the national existing home market finished 2011 in balanced conditions (bottom chart). Therefore, fears that the current trend will degenerate into a sudden and huge price correction
similar to the one that occurred in the U.S. (top chart) are premature, especially with mortgage rates at their lowest level on record. Given such low rates, we are pleased to see that home sales have increased rather moderately lately, suggesting that households do care about their debt level. In our view, the performance of the Canadian labor market does not herald a protracted period of substantial house price declines.

House prices dropped 0.2% in November
A correction of previous overdone price increases

Canada Conditions on the existing home market

Latest comments

Loading next article…
Install Our App
Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2025 - Fusion Media Limited. All Rights Reserved.