Teranet HPI June 2012

Teranet Monthly Report - JULY 2012

HOME PRICES IN JUNE UP 5.4% FROM A YEAR EARLIER

Monthly changes in the Teranet-National Bank National Composite House Price Index tend to be greater in May and June of each year. The readings for May and June 2012 bear out this tendency, showing monthly gains of 1.1% and 1.2% respectively. The June increase takes the index to a new high for the third month in a row. June was also the second consecutive month in which none of the 11 metropolitan markets surveyed showed a price decline from the month before. The monthly rise was 1.7% in Calgary and Ottawa-Gatineau, 1.6% in Toronto, 1.5% in Winnipeg, 1.4% in Quebec City, 1.3% in Edmonton, 1.1% in Montreal, 0.9% in Halifax, 0.7% in Victoria and Hamilton and 0.5% in Vancouver. For the two Alberta markets it was the third consecutive strong monthly gain after seven months of decline. For Halifax it was the eighth straight monthly gain, the longest such run among the 11 markets. For Toronto and Montreal it was the sixth consecutive monthly gain. The index is now at an all-time high in eight of the 11 markets surveyed, the exceptions being Victoria, Calgary and Edmonton.
Teranet – National Bank National Composite House Price Index™

Since monthly changes are subject to seasonal factors, the 12-month change is revealing. In June the composite index was up 5.4% from a year earlier, a seventh consecutive month of deceleration in 12-month inflation. Since prices rose 1.4% from June to July last year, further deceleration is possible in July 2012. However, the only market in which 12-month inflation has followed the national composite in decelerating for seven straight months is Vancouver. Only two of the 11 markets show 12-month inflation exceeding the national average: Toronto, 9.5%, and Winnipeg, 7.8%. In Hamilton prices were up 5.4% from a year earlier, in Halifax 4.7%, in Montreal 4.4%, in Ottawa-Gatineau 4.0%, in Calgary 3.4%, in Quebec City 3.2%, in Vancouver 3.1% and in Edmonton 2.8%. Prices In Victoria were down 2.0% from a year earlier.


Metropolitan area Index level

June % change m/m % change y/y

Calgary 160.36 1.7 % 3.4 %

Edmonton 166.78 1.3 % 2.8 %

Halifax 140.73 0.9 % 4.8 %

Hamilton 133.69 0.7 % 5.4 %

Montreal 149.66 1.1 % 4.4 %

Ottawa 141.14 1.7 % 4.0 %

Quebec 169.71 1.4 % 3.2 %

Toronto 145.03 1.6 % 9.5 %

Vancouver 173.33 0.5 % 3.1 %

Victoria 140.40 0.7 % -2.0 %

Winnipeg 187.84 1.5 % 7.8 %

National Composite 6 153.58 1.3 % 5.9 %

National Composite 11 154.21 1.2 % 5.4 %
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 of Canada

Teranet - National Bank House Price Index™ thanks the author for their special collaboration on this report.