Thursday, February 24, 2011

Teranet Index - December 2010


Home prices up 0.3% in December

Canadian home prices in December were up 0.3% from the previous month, according to the Teranet-National Bank National Composite House Price Index™. The advance followed three consecutive monthly declines that had ended an unbroken run of 16 increases. December prices were up from the previous month in five of the six metropolitan markets surveyed. A 0.1% rise in the Calgary market was the first gain in five months. The rise was 0.5% in Vancouver and Montreal, 0.2% in Toronto. Halifax prices jumped 3.6%. We note that the composite index would have advanced 0.3% even if Halifax had been flat. The 0.4% monthly decline of Ottawa prices was the fourth in a row.

Teranet – National Bank National Composite House Price Index™

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The 12-month gain in the composite index slowed in December to 4.1%. It was the sixth month in a row of deceleration. Halifax was the only market to show an acceleration of its 12-month rise, to 8.5% in December from 2.7% in November. The 12-month increase was 4.0% in Toronto, 5.1% in Vancouver, 6.3% in Ottawa and 6.4% in Montreal. Calgary prices were down 2.9% from a year earlier, for a third consecutive month of 12-month deflation.

Data for January from the Canadian Real Estate Association show generally balanced conditions in major urban markets. Toronto and Vancouver could even be considered rather tight markets. The federal minister of finance announced January 17 that the maximum amortization period for an insured mortgage will be reduced to 30 years from 35 years effective March 18. This prospect could influence the resale market between now and the effective date.

Teranet – National Bank House Price Index™

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

Metropolitan areaIndex level
% change m/m% change y/y
Calgary154.360.1 %-2.9 %
Halifax132.563.6 %8.5 %
Montreal136.220.5 %6.4 %
Ottawa130.51-0.4 %6.3 %
Toronto124.430.2 %4.0 %
Vancouver156.620.5 %5.1 %
National Composite137.510.3 %4.1 %

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

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 Group
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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