12-Month Home Price Inflation At 2.3% In August

September 12, 2013

The Teranet-National Bank National Composite House Price Index™ rose to an all-time high in August, as did the indexes of three of the 11 metropolitan markets covered in the index: Hamilton, Toronto and Ottawa-Gatineau. However, the composite index was up only 2.3% from a year earlier. Though this was an acceleration from July, the 12-month gains in the five months ending in August were the smallest since November 2009. By way of comparison, the Case-Shiller home price index of 20 U.S. metropolitan markets was up 12.0% from a year earlier in June (the latest available reading). In Canada, the price rise over the 12 months ending in August exceeded the cross-country average in six of the 11 markets: Calgary (6.5%), Hamilton (5.5%), Toronto (3.8%), Quebec City (3.5%), Edmonton (2.6%) and Winnipeg (2.6%). It lagged the average in Montreal (0.7%) and Ottawa-Gatineau (0.3%). Prices were down from a year earlier for a sixth straight month in Victoria (−2.5%), for a 13th straight month in Vancouver (−0.1%) and for the first time since September 1996 in Halifax (−0.6%).


Teranet – National Bank National Composite House Price Index™

The August composite index was up 0.6% from the month before. Though this rise may seem substantial, it is somewhat below the seasonal norm. In 15 years of index data collection, the average August gain has been 0.8%. This year's August prices were up from July in six of the 11 markets surveyed. The gain exceeded the national average in five markets: Toronto (1.2%), Calgary (1.0%%), Victoria and Hamilton (0.8%) and Vancouver (0.7%). It lagged the average in Ottawa-Gatineau (0.2%). In five markets, the most since May, prices were down from the month before: Edmonton (−0.2%), Winnipeg (−0.2%), Montreal (−0.3%), Quebec City (−0.9%) and Halifax (−1.6%).
Teranet – National Bank House Price Index™

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

Metropolitan areaIndex level
August
% change m/m% change y/y
Calgary171.891.0 %6.5 %
Edmonton172.88-0.2 %2.6 %
Halifax140.74-1.6 %-0.6 %
Hamilton146.780.8 %5.5 %
Montreal151.44-0.3 %0.7 %
Ottawa143.470.2 %0.3 %
Quebec178.16-0.9 %3.5 %
Toronto154.101.2 %3.8 %
Vancouver170.180.7 %-0.1 %
Victoria138.490.8 %-2.5 %
Winnipeg194.07-0.2 %2.6 %
National Composite 6157.07 0.7 %1.7 %
National Composite 11159.12 0.6 %2.3 %

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.

1 Value of Dwelling for the Owner-occupied Non-farm, Non-reserve Private Dwellings of Canada.