12-Month Home Price Inflation Falls To 1.8% In June

July 12, 2013

12-MONTH HOME PRICE INFLATION FALLS TO 1.8% IN JUNE

The Teranet-National Bank National Composite House Price Index™ rose to an all-time high in June, as did the indexes of six of the 11 markets covered by the composite index: Winnipeg, Hamilton, Toronto, Montreal, Quebec City and Halifax. However, the composite index was up only 1.8% from a year earlier, the smallest 12-month gain since November 2009. By way of comparison, the Case-Shiller home price index of 20 U.S. metropolitan markets was up 12.1% from a year earlier in April (the latest available reading). In Canada, the price rise over the 12 months ending in June exceeded the cross-country average in seven of the 11 metropolitan markets: Hamilton (7.0%), Quebec City (5.6%), Calgary (5.5%), Winnipeg (3.9%), Edmonton (3.0%), Toronto (3.6%) and Halifax (2.3%). The price rise lagged the average in Montreal (1.4%) and Ottawa-Gatineau (1.1%). Prices were down from a year earlier for a fourth straight month in Victoria (−4.6%) and for an 11th straight month in Vancouver (−2.8%).

Teranet – National Bank National Composite House Price Index™

In June the composite index was up 1.0% from May. Though this increase may seem large, it is somewhat less than the average June gain of 1.2% over the last 12 years. (May, June and July are generally the months in which upward pressure on home prices is strongest. In 15 years of index data collection, the composite index has not declined in any of these three months.) In June of this year, prices were up from the month before in all markets surveyed. The increase exceeded the national average in three markets: Hamilton (1.8%), Toronto (1.4%) and Calgary (1.4%). In Halifax, Ottawa-Gatineau and Vancouver the rise was 0.9%, in Winnipeg 0.8%, in Montreal 0.6%, in Quebec City 0.5%, in Edmonton 0.3% and in Victoria 0.1%. The rise in Victoria ended a run of four straight monthly declines.

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
June
% change m/m% change y/y
Calgary169.211.4 %5.5 %
Edmonton171.790.3 %3.0 %
Halifax143.900.9 %2.3 %
Hamilton142.991.8 %7.0 %
Montreal151.800.6 %1.4 %
Ottawa142.710.9 %1.1 %
Quebec179.190.5 %5.6 %
Toronto150.301.4 %3.6 %
Vancouver168.420.9 %-2.8 %
Victoria133.960.1 %-4.6 %
Winnipeg195.230.8 %3.9 %
National Composite 6 156.01 1.1 % 1.6 %
National Composite 11 157.00 1.0 % 1.8 %

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.