The Teranet-National Bank House Price IndexTM for May 2018 was released last week digging deep into the house price index for the previous month, April 2018.
In April, the index rose moderately — about 0.2% overall. Eight out of 11 individual markets saw small gains, too: Quebec City, Hamilton, Halifax, Vancouver, Edmonton, Toronto, Montreal, and Victoria.
The Calgary index stayed flat and the Ottawa-Gatineau and Winnipeg markets were slightly down.
The Vancouver area’s house price index remains the highest in Canada at 288.19, but it only rose 0.3% in April. Over the past five months, while the Vancouver index has continued to go up, the increases have been getting smaller.
The average sales price for various property types in the Vancouver area was $928,528 last month.
The Toronto index was up less 2% than the same month in 2017, and down 7.1% from its peak in July of 2017. Some experts have suggested this points to a stabilization in the market after provincial measures to rein it in, such as the Foreign Buyers’ Tax and stricter mortgage rules that started in January of 2018.
“The sales-to-listing ratio for Toronto is at a level that historically has been consistent with a broad stagnation in prices over the next few months,” Capital Economics economist Paul Ashworth said in a research note.
The average price for properties in the Toronto region was $727,106 last month.
It’s expected that the Canadian housing market will continue to soften over the coming months. The Bank of Canada is planning three more interest rate announcements for May 30, July 11, and September 4. Many experts predict there will be at least more increase this summer.
National Bank senior economist Marc Pinsonneault estimates moderate hikes will continue to characterize the Composite Index over the coming months, as the Toronto and Vancouver markets become more balanced.
“Let’s recall that over the last two preceding years, conditions in both markets were very tight, triggering double-digit percentage increases in the Composite index on a [year-over-year] basis,” Pinsonneault stated in a statement from National Bank.
“We do not think that market conditions will deteriorate significantly from now on in both markets, as sales seem to have stabilized lately.”
The next Teranet-National Bank House Price IndexTM is scheduled for June 13, 2018. See a full historic analysis of the house price index at www.housepriceindex.ca.