Teranet real estate prices index shows the largest decline on record

According to the new report, a Canadian home price index showed the strongest decline in its history last month, as growing borrowing rates slowed down the national real estate market.

The Teranet–National Bank National Composite House Price Index was down by 2.4% from July on an unadjusted basis, marking the biggest month-over-month drop recorded since the index started back in 1999. On an adjusted basis, the index went down by 2.1%, which is also a record number and the fourth consecutive decrease.

Housing prices reported declines in 9 of the 11 metropolitan areas included in the index. The strongest drops were seen in Hamilton, Ont. (-5.4%), Ottawa-Gatineau (-3.8%), Halifax (-3.6%) and Toronto (-3.5%).

Such results coincide with the early numbers from other real estate data sources.

Earlier, Canadian Real Estate Association (CREA) reported that the national average home price showed an annual decline by 3.9% to $637,673 in August. A monthly comparison shows that the national average price, strongly affected by sales in Greater Vancouver and the Greater Toronto Area, rose to $7,702.

At the same time, the Aggregate Composite MLS Home Price Index (HPI) was down by 1.6% from July, which is not a small drop from historical point of view, but is still less than the decreases of June and July.

The Teranet-National Bank index saw an annual gain of 8.9%, marking “the fourth month of lower growth than the previous month in row.”

Price hikes were seen in all 11 cities that it surveys. The largest annual gain of 15.4% was reported in Halifax. Victoria follows with 14.8, while Calgary saw a 13.6% increase.

The twenty other cities tracked by Teranet but not included in the index also showed price growth compared to a year ago.

The index includes Calgary, Edmonton, Vancouver, Victoria, Winnipeg, Halifax, Hamilton, Ottawa-Gatineau, Toronto, Montreal, Quebec City.

 

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