House Price Index

NEWSLETTER - JANUARY 27, 2010

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House Price Index

Monthly Report

JANUARY 2010

National price rise driven by Vancouver

Canadian home prices in November were up 2.6% from a year earlier, according to the Teranet-National Bank National Composite House Price Index™. It was the second consecutive month of prices higher than 12 months earlier, after 10 consecutive months of 12-month deflation. The reason for the turnaround is that November was the seventh straight month in which the index for Canada as a whole was up from the month before, leaving it down only 0.1% from the peak of August 2008. Though the monthly gain of 0.8% was solid, it was the first time in six months that it was less than 1.2%. And in only one market, Vancouver, did the price rise exceed the 0.8% national average. Without Vancouver the composite index would have been up only 0.5%.

Teranet – National Bank National Composite House Price Index™

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The Vancouver monthly increase was 1.9% in November. It was the sixth month of recovery for prices in this market and each monthly gain has been at least 1.5%, for a total annualized rise of 23.3%. No other metropolitan area showed a November gain exceeding 0.6%. This is a first in the current recovery, since Toronto's monthly increases had always been at least 1.5%. The monthly rises were 0.6% in Toronto and Calgary, 0.4% in Halifax and Ottawa and 0.1% in Montreal. Prices in Montreal have been almost flat for four months.

The only market still showing 12-month deflation in November was Calgary, down 2.1% from a year earlier. Vancouver prices were up 1.0% from a year earlier, their first 12-month inflation, though they were still 2.3% off the peak of June 2008. Calgary prices were 10.7% off their peak of August 2007. Prices in the other four markets have been above their pre-recession peaks for at least five months except for Toronto, which passed the peak two months ago. Twelve-month inflation was 4.8% in Ottawa, 4.6% in Toronto, 3.6% in Montreal and 2.2% in Halifax.

Teranet – National Bank House Price Index™

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

Metropolitan area Index level
November 2009
% change m/m % change y/y
Calgary 156.49 0.6 % -2.1 %
Halifax 124.54 0.4 % 2.2 %
Montreal 126.58 0.1 % 3.8 %
Ottawa 122.32 0.4 % 4.8 %
Toronto 118.18 0.6 % 4.6 %
Vancouver 147.15 1.9 % 1.0 %
National Composite 130.62 0.8 % 2.6 %

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 Team
National Bank Financial Group

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.

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In no event shall any of NBC, Teranet, their respective affiliates, any of their or their direct or indirect information providers nor any other third party involved in, or related to, compiling, computing or creating any of the Index Information (collectively, the "Index Data Provider Parties") have any liability to any person or entity for any damages, whether direct, indirect, special, incidental, punitive, consequential (including, without limitation, loss of use, lost profits or revenues or any other economic loss) arising in any manner out of your use or inability to use any of the Index Data contained in this monthly report, even if such party might have anticipated, or was advised or notified of, the possibility of such damages.

The Teranet - National Bank House Price Index™ is an independently developed representation of the rate of change of Canadian single-family home prices.  The measurements are based on the property records of public land registries. The monthly indices cover six Canadian metropolitan areas: Calgary, Halifax, Montreal, Ottawa, Toronto and Vancouver. The metropolitan areas are combined to form a Canadian composite index. 

In addition to their informational role, the Teranet - National Bank House Price Index™ was developed to be trustworthy benchmark for financial professionals. Teranet and NBC offer licenses covering all index-linked products.

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