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Without the Seasonal Boost, the Composite Home Price Index Would Have Been Down in June

July 18, 2019

In June the Teranet–National Bank National Composite House Price IndexTM was up 0.8% from the month before. The rise was on the small side for a month of June – the 21-year average for the month is 1.2%. As in May, it was only because of seasonal pressure that the index rose at all. If these pressures are taken out (seasonal adjustment), the composite index would have retreated 0.4% in May and 0.5% in June. So the last two monthly readings cannot be taken as a sign of market vigour. The unadjusted index was braked by declines of 0.3% in the Vancouver market and 0.1% in Calgary and by a flat month for Edmonton.

For Vancouver it was the 11th straight month without a rise and for Calgary the 11th in the last 12 months. These readings are consistent with signals from other indicators of soft resale markets in those metropolitan areas. Rises were small in the indexes for Winnipeg (0.1%) and Quebec City (0.3%). They were livelier in the indexes for Montreal (0.8%), Toronto (1.3%), Halifax (1.5%), Hamilton (1.6%), Victoria (2.1%) and Ottawa-Gatineau (2.2%). For Toronto, Hamilton and Ottawa-Gatineau, June was a third consecutive month of gains. The most sustained performer has been the Montreal market, whose index has risen in 13 of the last 15 months.

The recent weakness of indexes for several markets is reflected in the 12-month advance of the composite index, which in June was the smallest since November 2009 at 0.5%. The 12-month change was held down by four of the five markets in Western Canada – Vancouver (down 4.9% from a year earlier), Calgary (−3.8%), Edmonton (−2.6%) and Winnipeg (−0.4%). The exception was Victoria, whose index edged up 0.3%. The 12-month changes were larger for Quebec City (+1.5%), Halifax (+2.7%), Toronto (+2.8%), Hamilton (+4.8%), Montreal (¬5.4%) and Ottawa-Gatineau (6.3%).

Besides the Toronto and Hamilton indexes included in the composite index, indexes exist for seven other urban areas of the Golden Horseshoe. Their downtrend since last August noted in our previous reports is now a thing of the past: all of these indexes were up over the six months ending in June – Barrie 1.0%, Oshawa 1.3%, Guelph 1.5%, Kitchener 2.8%, St. Catharines 3.0%, Brantford 7.1% and Peterborough 7.8%).

Indexes not included in the composite index also exist for seven markets outside the Golden Horseshoe. The two in B.C. have been struggling since the beginning of the year, with Abbotsford-Mission down 3.4% over the period and Kelowna showing a rise only because of a strong gain in June. The five in Ontario have done better year to date – London up 3.3%, Sudbury 3.4%, Windsor 5.4%, Kingston 5.7% and Thunder Bay 9.2%.

For the full report including historical data, please visit www.housepriceindex.ca.

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