National home price index posts another below-average gain

by Steve Randall on 20 Sep 2019

A leading measure of Canadian home prices posted a gain in August but reflected the weakness in some key markets.

The Teranet-National Bank National Composite House Price Index was up 0.4% compared to the previous month, continuing the trend of gains below the 21-year average for each month in the last three (which is 0.7% for August).

However, had the index been seasonally adjusted, it would have seen a slight increase, reversing a trend seen in the previous three months and suggesting an end to an underlying downtrend after correction.

The overall index reading of 227.51 means a 0.6% gain year-over-year, which is small but significant as the first acceleration in 9 months.

Vancouver posted a 13th month without an increase in its HPI with a 0.8% drop in August. Edmonton (−0.1%) and Quebec City (−0.4%) also posted declines, the latter reversing after three monthly gains.

On a positive note, home sales in August were up 55% from March in Vancouver, where market conditions went from “favorable to buyers” to “balanced” (right chart). Over that period, home sales rose 19% in Calgary and 12% in Edmonton. These improvements, if sustained, will sooner or later help limit home-price deflation in this region.

There were HPI gains for Victoria 0.2%, Calgary 0.6%, Hamilton 0.7%, Winnipeg 0.7%, Toronto 0.8%, Montreal 1.1%, Ottawa-Gatineau 1.7% and Halifax 1.8%.

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