Wednesday, October 28, 2009

Teranet House Price Index for August 2009

OCTOBER 2009

A second consecutive month of price rises in all survey markets

Canadian home prices in August were down 3.4% from their pre-correction peak of August 2008, 12 months earlier, according to the Teranet-National Bank National Composite House Price Index™. It was the eighth consecutive 12-month decline, but the 12-month decline has been diminishing steadily since it peaked at 6.9% in May. The reason is that August is the fourth straight month in which the index reading for Canada as a whole has been up from the month before. The August rise of 2.0% was particularly vigorous. It was the second month in a row in which prices were up from the month before in all six of the metropolitan markets represented in the index. This turnaround is consistent with an improvement in market conditions in the first half of 2009 - more homes have been selling and fewer have been coming on the market.

Teranet – National Bank National Composite House Price Index™

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The monthly rises in August were 2.7% in Toronto, 2.0% in Calgary, 1.7% in Vancouver, 1.5% in Ottawa, 1.2% in Montreal and 0.6% in Halifax. For Toronto it was the fourth consecutive rise of 2% or more, taking the cumulative gain to 9.4% in just four months. By way of comparison, Montreal showed a sixth consecutive rise but the cumulative six-month gain was only 4.8%.

In the three easternmost markets, Montreal, Halifax and Ottawa, August prices were above the pre-recession peak. Toronto prices are now down only 3.0% from their August 2008 peak. Vancouver prices are still down 7.7% from their June 2008 peak and Calgary's are down 12.9% from their peak of August 2007, two years earlier.

Teranet – National Bank House Price Index™

The historical data of the Teranet – National Bank House Price Index™ is available at www.housepriceindex.ca.

Metropolitan areaIndex level
August 2009
% change m/m% change y/y
Calgary152.692.0 %-8.3 %
Halifax122.840.6 %0.9 %
Montreal126.351.2 %3.6 %
Ottawa120.441.5 %2.8 %
Toronto113.822.7 %-3.0 %
Vancouver139.001.7 %-7.7 %
National Composite126.312.0 %-3.4 %

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.

By:

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.

In addition to their informational role, the Teranet - National Bank House Price Index™ was developed to be trustworthy benchmark for financial professionals. Teranet and NBC offer licenses covering all index-linked products.

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15 comments:

jesse said...

The biggest thing to note: every region is seeing price increases MOM. Why? The elephant in the room whispers to me: low interest rates.

first_time_buyer said...

"The elephant in the room whispers to me: low interest rates."

I think you missed the bigger elephant - CMHC sponsored mortgages.

jesse said...

CMHC was sponsoring mortgages last year too when prices were falling and sales anaemic. Affordability was knocked down by over 20% since last year. While CMHC has played a role, without low rates sales would be substantially lower and price rises unlikely.

JimTan said...

Wow! More historical data.

jesse said...

"Wow! More historical data."

As opposed to.... non-historical data? Do you even read what you write buddy?

JimTan said...
This comment has been removed by the author.
JimTan said...

"Wow! More historical data."

As opposed to.... non-historical data? Do you even read what you write buddy?

Dear Jesse,

How about some current data, as opposed to data two months old?

jesse said...

Don't be coy, Jim. You've been around this blog and other places long enough to know Teranet's methodology. If you don't have other sources of data to add your comment is nothing but a waste of our readers' valuable time. From every indication they are more than capable of understanding the data without you. If you have sources of more recent and relevant data post them here, otherwise give it a rest.

JimTan said...

Try Agent Will's weekly statistics!

http://agentwill.com/weekly-stats/

jesse said...

The Teranet HPI offers the most accurate price information. To achieve this accuracy it must sacrifice timeliness. AgentWill's data is useful in its own respect but inaccurate in terms of pricing.

Ice said...

Jim the agent Tan at it again?

JimTan said...

"The Teranet HPI offers the most accurate price information. To achieve this accuracy it must sacrifice timeliness. AgentWill's data is useful in its own respect but inaccurate in terms of pricing."

Yes, Jesse is right. Accuracy is very important!

JimTan said...

"Jim the agent Tan at it again?"

Not at all! I'm making sure that you guys know what you are doing. Your financial activities are your own business.

Ice said...

"Not at all! I'm making sure that you guys know what you are doing. Your financial activities are your own business."

So you admit that Jesse made you look like a "tool" with remark?

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