Thursday, July 28, 2011

May 2011 Teranet House Price Index

JULY 2011

Canadian home prices up 1.3% in May

Canadian home prices in May were up 1.3% from the previous month, according to the Teranet-National Bank National Composite House Price Index™. This rise took the index to a new high of 142.27 (June 2005 = 100). It was the second consecutive monthly increase exceeding 1% and the largest since July 2010. It was also the sixth consecutive monthly rise, coming after three straight monthly declines. As in April, prices were up in all six of the metropolitan markets surveyed. The May gain was 1.6% in Vancouver and Toronto, 0.7% in Montreal, 0.6% in Calgary, 0.5% in Ottawa and 0.1% in Halifax. For Vancouver it was the eighth consecutive monthly increase. The Toronto index topped its recent peak of July 2010. Calgary prices, meanwhile, are still 4.6% below their previous peak. The index for Ottawa was only fractionally away from its August 2010 peak. Indexes for the other three markets passed their respective peaks some time ago in the recovery from the correction of late last year.

Teranet – National Bank National Composite House Price Index™

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The 12-month gain of the composite index in May was 4.4%, the same as in April. The largest 12-month rise was 6.3% in Montreal, followed by 6.2% in Vancouver, 5.6 in Ottawa, 4.8% in Halifax and 4.6% in Toronto. Though Toronto showed the smallest 12-month inflation, it is the only market in which 12-month inflation has accelerated for three consecutive months. Twelve-month inflation decelerated for a fifth consecutive month in Halifax. Calgary prices were down 4.1% from a year earlier, for an eighth consecutive month of 12-month deflation.
Given the time lags between home sales and their entry in public land registries, it is possible that the large April and May rises of the composite index were due to front-loading of sales to beat the March effective date of an announced shortening of the maximum amortization period for insured mortgages. This front-loading was very perceptible in Vancouver, incidentally the market with the fastest price index growth from March to May. In June, according to seasonally adjusted data from the Canadian Real Estate Association, market conditions were balanced in the country as a whole while appearing tight in Toronto.

Teranet – National Bank House Price Index™

The historical data of the Teranet – National Bank House Price Index™ is available at
Metropolitan areaIndex level
May 2011
% change m/m% change y/y
Calgary153.720.6 %-4.1 %
Halifax134.260.1 %4.8 %
Montreal141.360.7 %6.3 %
Ottawa133.300.5 %5.6 %
Toronto128.721.7 %4.6 %
Vancouver164.921.6 %6.2 %
National Composite142.271.3 %4.4 %
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

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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