Providing Thoughtful Analysis on the Housing Market
Wednesday, March 31, 2010
January 2010 Teranet House Price Index
The smallest monthly increase since prices began rising
Canadian home prices in January were up 7.5% from a year earlier, according to the Teranet-National Bank National Composite House Price Index. January was the fourth consecutive month in which prices were up from a year earlier, after 10 consecutive months of 12-month deflation. The turnaround is due to nine straight monthly increases in the countrywide index. However, January's 0.5% monthly gain was the smallest so far.
Teranet – National Bank National Composite House Price Index™
For the first time in nine months, none of the six metropolitan markets surveyed showed a monthly increase of as much as 1%. The rise was 0.9% in Vancouver, 0.7% in Toronto, 0.6% in Halifax, 0.4% in Montreal and 0.3% in Ottawa. In Calgary prices declined 0.5%. Prices are now down 9.7% from the previous peak in Calgary and 0.2% in Vancouver. The other four markets passed their pre-recession peaks between May and October last year.
The index is now up 9.0% from its April 2009 bottom. This steep rise has been led by Vancouver (up 11.7% from May 2009) and Toronto (11.0% from April 2009). In other markets the increases have been more modest: Calgary 6.7% since June, Ottawa 6.5% since last April, Montreal 3.6% since February 2009, Halifax 1.5% since February 2009.
The 12-month appreciation was 9.4% in Toronto, 8.9% in Vancouver, 8.1% in Ottawa, 5.3% in Montreal, 4.6% in Halifax and 1.9% in Calgary.
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 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.