Providing Thoughtful Analysis on the Housing Market
Friday, August 28, 2009
Teranet House Price Index for June 2009
A second consecutive monthly rise in June
Canadian home prices in June were down 6.2% from a year earlier, according to the Teranet-National Bank National Composite House Price Index. It was the seventh consecutive 12-month decline. The index is now down 6.8% from its peak of August 2008. However, it rose in both May and June after eight straight monthly declines. The June monthly rise was 1.5%. The turnaround is consistent with an improvement in market conditions in recent months for the country as a whole - more homes have been sold and fewer have been coming on the market.
Teranet – National Bank National Composite House Price Index™
Of the six constituent metropolitan-area indices, four showed monthly rises in June - Montreal (1.2%), Toronto (2.3%), Ottawa (2.1%) and Vancouver (1.6%). For Vancouver it was a first monthly rise after 11 consecutive declines. For Montreal it was a fourth straight monthly increase. In both Halifax and Calgary, June prices were down 0.2% from the month before. For Calgary it was the 12th consecutive monthly decline and the 19th in 22 months.
Four of the six city indices were down from a year earlier - Vancouver (−10.7%), Calgary (−12.5%), Toronto (−5.6%) and Halifax (−0.4%). Montreal, up 2.4% from June 2008, is the only market that has yet to show a 12-month decline. Ottawa has shown a 12-month decline only once, in May of this year.
The composite index is down 6.8% from the peak of August 2008. Toronto prices are now down 7.5% from their peak of the same month. Calgary is 15.4% below its peak of August 2007. Halifax and Ottawa show smaller declines from peak, 0.6% from November and 2.2% from October respectively.
The Teranet–National Bank House Price Index™ is estimated by tracking observed or registered home prices over time using data collected from public land registries. All dwellings that have been sold at least twice are considered in the calculation of the index. This is known as the repeat sales method; a complete description of the method is given at www.housepriceindex.ca
The Teranet–National Bank House Price Index™ is an independently developed representation of average home price changes in six metropolitan areas: Ottawa, Toronto, Calgary, Vancouver, Montreal and Halifax. The national composite index is the weighted average of the six metropolitan areas. The weights are based on aggregate value of dwellings as retrieved from the 2006 Statistics Canada Census. According to that census1, the aggregate value of occupied dwellings in the metropolitan areas covered by the indices was $1.168 trillion, or 53% of the Canadian aggregate value of $2.207 trillion.
All indices have a base value of 100 in June 2005. For example, an index value of 130 means that home prices have increased 30% since June 2005.
Marc Pinsonneault Senior Economist Economy & Strategy Team National Bank Financial Group
Teranet - National Bank House Price Index™ thanks the author for their special collaboration on this report.
1 Value of Dwelling for the Owner-occupied Non-farm, Non-reserve Private Dwellings of Canada.
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The Teranet - National Bank House Price Index™ is an independently developed representation of the rate of change of Canadian single-family home prices. The measurements are based on the property records of public land registries. The monthly indices cover six Canadian metropolitan areas: Calgary, Halifax, Montreal, Ottawa, Toronto and Vancouver. The metropolitan areas are combined to form a Canadian composite index.
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