Index confirms price correction
April 2, 2018
The most recent Teranet-National Bank house price index has confirmed that Canadian house prices are tracking down. The index for February shows that home prices were down for the fourth time in six months, dropping 0.1 per cent from a month earlier.
Home prices are now off a total of 1.9 per cent over the past six months. Prices have declined in seven of the 11 markets profiled in Canada, which includes Greater Toronto.
Metro Vancouver posted a price increase in the index, but Marc Pinsonneault, one of the authors of the index, said home prices will likely drop in the city due to slumping sales.
Vancouver single-family home sales fell 39.4 per cent year-over-year in February, while condos experienced a 7.1 per cent decline, according to local real estate boards. “Therefore home price pressures may fade out in [Vancouver] over the next few months, even if for the moment the home resale market remains tight,” the Teranet-National Bank index statement reads.
Toronto home sales declined in January and February to what Pinsonneault said was the lowest seasonally adjusted level since July 2010.
“It seems that the new stricter bylaws on qualification for uninsured mortgages together with increased interest rates are taking a bite at least in the two most unaffordable large markets in Canada,” he concluded.
The national February house price index was still up 7.5 per cent from a year ago, but momentum is noticeably weakening as January’s year-on-year figure had been up 8.7 per cent, Pinsonneault noted.