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Canada: House prices flat in October

ByThe National Bank of Canada
Published 12/22/2011, 08:46 AM
Updated 05/14/2017, 06:45 AM
FACTS:

The Teranet–National Bank National Composite House Price IndexTM was flat in October for the second month in a row (top chart). October prices were up 0.8% in Toronto, 0.4% in Winnipeg, 0.3% in Quebec City and 0.1% in Hamilton. In the remaining seven of the 11 metropolitan markets surveyed, prices were down: 1.5% in Victoria and Calgary, 0.9% in Halifax, 0.4% in Ottawa-Gatineau, 0.3% in Vancouver, 0.2% in Edmonton and 0.1% in Montreal. It was the fourth monthly decline in a row for Halifax and the second in a row for Calgary, Edmonton and Montreal. The 12-month gain of the composite index was 7.0% in October, an acceleration from the 12-month gains of August and September. Toronto’s 12-month rise (10.4%) became the largest among the 11 cities, edging out Vancouver’s 10.0%. In Winnipeg the 12-month rise was 7.8%, in Quebec City 5.6%, in Montreal 5.4%, in Hamilton 4.5%, in Ottawa-Gatineau 3.8% and in Calgary 1.7%. Prices were slightly lower than those of a year earlier in Victoria (−0.2%) and Edmonton (−0.1%).

OPINION: Nationally, the pause in home-price inflation in the last two months follows five abnormally steep rises (1% or more monthly). Price corrections in some markets have brought them more into line with market conditions, which in the country as a whole are generally balanced (middle chart). Absent a Canadian recession, there is no reason to see why the situation of these markets would deteriorate markedly. However, further price declines are possible, especially if access to mortgage credit were restricted by additional regulatory measures. In any case, home prices still need to grow only moderately to bring the spread between cost of renting and cost of owning closer to its average since 1995 (bottom chart).

House prices stable in Canada in September and October
Conditions on the existing home market

Buying a house compared to renting

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