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Index Growth Slowed in December

January 20, 2021 • House Price Index

House price Index Banner - Teranet and National Bank of Canada

January 20, 2021 

In December the Teranet–National Bank National Composite House Price IndexTM was up 0.6% from the previous month, the strongest gain for a month of December since 2009. However, it was a second consecutive month in which the index rose less than the month before. The rise was led by six of the 11 constituent markets: Victoria (1.3%), Halifax (1.2%), Ottawa-Gatineau (1.2%), Montreal (1.0%), Hamilton (0.8%) and Vancouver (0.7%). Index growth was slower in Toronto (0.4%), Winnipeg (0.4%), Calgary (0.4%) and Edmonton (0.1%). The index for Quebec City was down 1.1% from the month before – the first time in four months in which the markets of the composite index did not all show gains.

The strong rise of prices is consistent with the rise of home sales volume over the last several months as reported by the Canadian Real Estate Association. For a fourth straight month, the number of sale pairs[1] entering into the 11 metropolitan indexes was higher than a year earlier. The unsmoothed composite index,[2] seasonally adjusted, was up 0.2% in December – a cooling from the advances of the previous two months, suggesting that the uptrend of the published (smoothed) index could slow further in coming months.

The December composite index was up 9.4% from a year earlier, a fifth consecutive acceleration and the strongest 12-month gain since November 2017. It was led by five markets – Ottawa-Gatineau (19.7%), Halifax (16.3%), Montreal (15.2%), Hamilton (15.1%) and Toronto (10.3%). Lagging the countrywide average were Victoria (7.6%), Vancouver (7.1%), Winnipeg (5.7%), Quebec City (4.5%) and Edmonton (1.3%). Calgary was down 1.5% from a year earlier.

Besides the Toronto and Hamilton indexes included in the countrywide composite, indexes exist for seven other urban areas of the Golden Horseshoe – Barrie, Guelph, Brantford, Kitchener, St. Catharines, Oshawa and Peterborough. In December all seven were up from the previous month and from a year earlier. The 12-month gains ranged from 12.9% for Peterborough to 19.7% for Oshawa.

Indexes not included in the composite index also exist for 11 markets outside the Golden Horseshoe. Five of them are in provinces other than Ontario: Abbotsford-Mission and Kelowna, B.C.; Lethbridge, Alberta; and Trois-Rivières and Sherbrooke, Quebec. The December indexes for all five were up from the previous month, with gains ranging from 0.4% for Lethbridge to 2.6% for Trois-Rivières, and from a year earlier, with gains ranging from 0.4% for Lethbridge to 11.3% for Trois-Rivières.

As for the six markets in Ontario outside the Golden Horseshoe – London, Kingston, Belleville, Windsor, Thunder Bay and Sudbury – the December smoothed indexes were up from the previous month for all except Thunder Bay (−0.8%). The 12-month advances ranged from 7.7% for Thunder Bay to 17.9% for Windsor.

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