Housing Analysis: October 2010

Wednesday, October 27, 2010

Teranet House Price Index - August 2010

OCTOBER 2010

Monthly price rise of 0.2% in August

Canadian home prices in August were up 10.4% from a year earlier, according to the Teranet-National Bank National Composite House Price Index™. It was the smallest 12-month gain in six months. The metropolitan markets showing a similar deceleration included Toronto and Vancouver, though their price increases from a year earlier were still in the neighbourhood of 12%. For Ottawa, the market where prices have risen most in the last six months, the 12-month increase was 10.7%. In the other three markets the 12-month gains were more modest: 7.7% in Montreal, 6.8% in Halifax, 5.0% in Calgary.

Teranet – National Bank National Composite House Price Index™

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For a second consecutive month, prices did not rise from the month before in all six markets. The Calgary index was down 0.5% from June and the Vancouver index 0.4%. For Vancouver it was the second monthly decline in a row. In Toronto the monthly rise was 0.4%, the smallest in five months. In Montreal it was 0.5%, in Halifax 0.9% and in Ottawa 1.4%. For the composite index as a whole the monthly increase in August was 0.2%, the smallest since the index began climbing 16 months ago. The uninterrupted string of 16 monthly gains exceeds the 14-month run of August 2005 through September 2006.

Teranet – National Bank House Price Index™

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

Metropolitan area	Index level August 2010	% change m/m	% change y/y
Calgary	160.40	-0.5 %	5.0 %
Halifax	131.19	0.9 %	6.8 %
Montreal	136.10	0.5 %	7.7 %
Ottawa	133.32	1.4 %	10.7 %
Toronto	128.00	0.4 %	12.5 %
Vancouver	155.37	-0.4 %	11.8 %
National Composite	139.43	0.2 %	10.4 %

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 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.

Tuesday, October 19, 2010

Yawn!

To be blunt, I'm bored with following the real estate market.

It moves terribly slow and the human emotions involved are heated, to say the least, and can be largely irrational. This is frustrating so I've been taking a break.

During this break, I haven't been missing anything so I've concluded that it isn't worth very much effort or time for me to involve myself too much in this blog anymore. It was interesting and I still certainly hold my conclusion that real estate in the Vancouver area is grossly overpriced considering the rental yield.

Additionally, I have been enjoying being a dad to my two little boys and my work has been exceptionally busy so I just don't find I have the time to devote to doing a good job on the analysis part of the blog. There are others who have picked up the mantle of providing monthly charts and statistics so I feel my work in that respect is largely irrelavent.

Anyway, I'm not shutting the blog down. I'll be around and I still plan on posting interesting articles or videos that I stumble across. I just thought it was fair to post how I've been feeling lately.

Housing Analysis