Saturday, January 02, 2010

October 2009 Teranet House Price Index

DECEMBER 2009

Slower monthly price rises in three out of six markets

Canadian home prices in October were up 0.6% from a year earlier, according to the Teranet-National Bank National Composite House Price Index™. It was the first 12-month rise in almost a year. The reason for this turnaround after 10 consecutive months of 12-month deflation is that October was the sixth straight month in which the composite index was up from the month before. The monthly gain of 1.3% was the same as in September. Prices have now risen 1% or more for five months in a row. In October, however, the monthly rise varied significantly among the six metropolitan markets surveyed.

Teranet – National Bank National Composite House Price Index™

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In only two of the six were prices up more than 1% from the month before - Toronto, 1.6%, and Vancouver, 1.8%. The Calgary gain of 0.8% remained vigorous. But in the other three markets the rise was much more modest: Halifax 0.4%, Ottawa 0.3%, and Montreal 0.3%. In each of these three cities the monthly appreciation was the smallest since market bottom (except for one monthly decline each in Montreal and Halifax). Toronto is now the fourth market to top its pre-recession summit (August 2008). Toronto prices fell 11.3% over the eight months from that peak through last April and then climbed 12.9% (an annual rate of 27.4%) over the six months to October, recovering the lost ground and a bit more. In Vancouver, October prices were still down 4.1% from the peak of June 2008. In Calgary, they were down 11.3% from the peak of August 2007.

These two cities were also the only markets still showing 12-month deflation - 3.6% in Calgary, 2.2% in Vancouver. Twelve-month inflation was 3.4% in Montreal, 3.1% in Halifax, 3.1% in Ottawa and 2.3% in Toronto.

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
October 2009
% change m/m% change y/y
Calgary155.540.8 %-3.6 %
Halifax124.020.4 %3.1 %
Montreal126.430.3 %3.4 %
Ottawa121.880.3 %3.1 %
Toronto117.431.6 %2.3 %
Vancouver144.471.8 %-2.2 %
National Composite129.521.3 %0.6 %

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.

4 comments:

JimTan said...

Guys,

Is Mike around? I would like to see an update on his model based on the Q3 surge in migration.


http://www.bcstats.gov.bc.ca/pubs/pop/pop093h.pdf

Population grew 0.6% over Q2 and 1.6% over 2008. Natural increase up 1.8% over 2008.

Biggest inter-provincial migration from Alberta 8k. Biggest single group of international migrants from China 23%. Chinese investors represent 61% of all Chinese migrants.

“During the third quarter of 2009, B.C. gained 17,710 and lost 14,253 inter-provincial migrants, resulting in the highest net inter-provincial migration gain (+3,457) among all the provinces and territories. In addition, this level is significantly higher than the 1,484 net interprovincial migration gain seen in the third quarter of 2008.”

“Net international migration continued as the main contributor to B.C.’s population growth over the July to September period. As a result of net international migration a total of 16,989 persons were added to B.C.’s population over this quarter.”


“Approximately 88 per cent of total landed immigrants to B.C. who arrived in the third quarter of 2009 indicated the Vancouver area as their intended destination. Upon their arrival, more than 93 per cent of all landed immigrants from Asia stated the Vancouver region as their intended destination. Relative to Asian
immigrants, a higher proportion of immigrants arriving from Europe, North and Central America and Africa settled outside the Greater Vancouver area.”

david said...

Jim,

I am not sure what "Chinese investors represent 61% of all Chinese migrants" means. I read that part of the report and I think it means of all the people who are investors for a living, 61% came from china. Dont go thinking that all of these people are real estate investors. It just means they invest in things. Could be gold, could be the stock market and it could be real estate.

I think you may be under the impression that they are all here to buy real estate and earn huge money, but this may not be the case.

vreaa said...

An article by Vancouver condo developer James Schouw in the Vancouver Sun has been dissected, archived and commented upon at VREAA:

“James Schouw in the Vancouver Sun – “Demand will always outstrip supply; Fundamentals and other factors don’t matter; Prices will rise; Don’t worry.”
link

buff_butler said...

Its not as awsome as JimTan makes it out to be.

The investor classification of immigrant means they have to have 800,000$C+ net worth and they have to give the govnt of canada 400,000$C that will be held in a 0 interest "investment" account. Basically the person is buying their way into canada by giving the government a loan.

http://www.cic.gc.ca/english/immigrate/business/investors/index.asp

I would be supprised if the population losses continue for alberta being one of the few places with a growth industry.