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Home Price Inflation Decelerates To 5.8% In May

ByThe National Bank of Canada
Published 06/28/2012, 03:08 AM
Updated 05/14/2017, 06:45 AM
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Facts

: On a y/y basis, the Teranet–National Bank,National Composite House Price IndexTM rose 5.8% in May (top chart), a deceleration from April’s print of 5.9%. Over the 11 metropolitan areas covered, 12-month price changes vary widely. Toronto (9.9%) and Winnipeg,(+7.1%) are the only two which exceed the national average. Prices rose 5.8% in Hamilton, 4.8% in Halifax, 4.5% in Montreal, 4.4% in Vancouver, 4.3% in Ottawa-, Gatineau, 3.8% in Quebec City, 3.4% in Calgary, 2.2%,in Edmonton. Prices declined 2.5% in Victoria. On a seasonally-adjusted basis, the Composite monthly growth was 0.5% in May. Monthly price rises exceed the national average in Calgary (+1.1%) and Toronto (+0.6%). Prices rose 0.5% in Edmonton and Vancouver, 0.3% in Winnipeg and Halifax, 0.2% in Quebec City, 0.1% in Montreal and Ottawa-Gatineau, and declined 0.2% in Victoria and Hamilton.
Canada House prices rose 5.8 in May a yy basis
Excluding Toronto and Calgary, recent price changes…
Opinion: On a seasonally adjusted basis, the monthly rises in the Composite index since the beginning of the year are still rather large. But it is clear that Toronto, and now Calgary, which account respectively for 34.6% and 8.3% off the Composite index, are the culprits. When Toronto and Calgary are both excluded from the seasonally adjusted index, monthly price changes since the beginning of the year suddenly appear quite reasonable (middle chart), and consistent with a balanced national market for existing homes, precisely the situation depicted by Canadian Real Estate Association data on sales and new listings (bottom chart). So, price pressures in the Canadian housing market currently emanate from two metropolitan areas, where conditions are not representative of the market at the national level.
are consistent with a balanced existing home market

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