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Home price gains cooling but still hit record

CBC News

Canadian home prices rose to another record high in July but moderating gains provided more evidence that the real estate market is cooling, according to a national benchmark index.

The Teranet-National Bank home price index showed that overall prices rose by 0.7% last month – cooling from the 1.0% monthly gains seen in each of the previous two months.

The index hit a new high for the third consecutive month.

But in Vancouver, prices fell 0.5% from June levels – the only one of the 11 cities the index tracks that showed a price drop.

On a year-over-year basis, prices in July were up 4.8% from a year earlier. But that was the eighth consecutive month that year-over-year gains have decelerated. “Further deceleration is possible in August,” National Bank said in a statement.

Annual price increases in the Toronto market led the market, with homes in Canada’s biggest real estate market rising 9.2% year-over-year – almost double the national increase.

Comment: And Toronto stays a seller’s market until that changes. Even with more listings and fewer sales, as long as prices keep rising, the buyers are held hostage.

In Victoria, prices fell 0.4% from the previous July.

The Teranet-National Bank home price index is the best-known example in Canada of what is known as the repeat sales method of trying to assess home price trends.

This method of tracking home prices in 11 major markets looks at how the price of the same home changes over time, so that only properties with at least two sales are entered into the mix.

The assumption underlying this process is that each selected property’s overall quality remains constant. The statistical model attempts to account for the high prevalence of homes that have been renovated.

But all methods of tracking home prices have tended to show price increases moderating in the last few months.

Market observers have said part of the cooling may be due to recent changes to mortgage insurance regulations that have made it more difficult for some first-time buyers to qualify for financing. Record levels of household debt may also be a factor.

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Contact the Jeffrey Team for more information – 416−388−1960

Laurin & Natalie Jeffrey are Toronto Realtors with Century 21 Regal Realty.
They did not write these articles, they just reproduce them here for people
who are interested in Toronto real estate. They do not work for any builders.
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Home prices show signs of easing

May 5, 2012 General Real Estate, National Real Estate, Other Real Estate Markets, Real Estate Prices, Toronto Real Estate

John Morrissy – Financial Post

Homes prices edged down 0.2% in February from the month before but were still 6.1% higher than a year ago, according to a well-watched housing index.

The month-over-month decline was the third such retreat in the past four months for the Teranet-National Bank National Composite House Price Index, released Wednesday, which measures price changes for repeat sales of single-family homes.

In January, prices rose 0.1%.

Teranet’s report showed prices falling from the previous month in six of the 11 metropolitan markets surveyed.

In Canada’s two hottest real-estate markets, prices in Vancouver fell 0.3%, the fifth consecutive decline, while prices in Toronto rose by just 0.1%. On a yearly basis, however, Toronto prices were 10% higher.

Nationally, prices were 6.1% higher than a year ago. In January, prices were 6.5% higher.

The data is likely to show up on the radar of Bank of Canada governor Mark Carney, who has repeatedly warned that Canadians are piling on too much debt as they buy homes whose prices keep rising.

At a House of Commons finance committee meeting Tuesday, Carney warned that house prices in relation to income levels are now running 35% above historical norms.

Last week, the Canadian Real Estate Association reported that seasonally adjusted sales in March rose 1.6% from year-earlier levels, although the national average home price declined 0.5% to to $369,677.

“It is a fact that according to CREA (the Canadian Real Estate Association) data for March, five of the 11 markets covered were rather favourable to sellers (Toronto, Hamilton, Winnipeg, Halifax and Quebec City). Overall, the Canadian market is nevertheless balanced,” said National Bank senior economist Marc Pinsonneault.

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Contact the Jeffrey Team for more information – 416-388-1960

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Canada home price index hits record high in July

September 29, 2011 General Real Estate, National Real Estate

* Resale home prices rise 1.3% in July from June
* Prices up 5.3% from year earlier

Reuters

Canadian resale home prices rose to a record high in July, their eighth consecutive monthly gain, according to report on Wednesday that an analyst said signaled a gradual slowdown in a strong market.

The monthly report on the Teranet-National Bank Composite House Price Index, which measures price changes for repeat sales of single-family homes in six metropolitan areas, showed overall prices were up 1.3% in July from June.

Overall prices were up 5.3% from a year earlier.

Canadian house prices dipped during the recession, but bounced back quickly and have kept climbing, fueling talk of an overheated market, if not a housing bubble.

The index notched its fourth consecutive monthly increase of more than 1% in July. In contrast to the three previous months, however, prices did not rise in all six metropolitan markets surveyed.

Prices rose 2.3% in Calgary, 1.7% in Toronto, 1.0% in Ottawa, 0.9% in Vancouver and 0.5% in Montreal, while declining 0.9% in Halifax.

In five of the six metropolitan areas, prices were at record highs.

“As the numbers show, the dispersion of the monthly increases was very high,” the report said. “Vancouver’s July rise extended its string of consecutive monthly gains to 10, currently the longest run of monthly rises among the markets covered.”

Analysts said, however, that the Teranet HPI report, along with the Canadian Real Estate Association’s report of existing home sales for July, released on Aug. 16, signal an orderly market slowdown.

“The overarching theme of a gradual moderation in the housing market remains intact,” said Mazen Issa, Canada macro strategist at TD Securities.

“On a year-ago basis, the HPI has been stable. Housing market activity has been kept in check,” he added. “For instance, housing starts and building permits have been stable for some time. We believe that in the backdrop of a low interest rate environment, macro prudential regulations will play a greater role.”

Canada’s federal government, worried about high debt levels, has tried to engineer a soft landing for the market with tighter rules for government-backed insured mortgages that took effect in March. The changes cap mortgage terms at 30 years rather than 35 and cut the amount homeowners can borrow against their homes to 85% from 90%.

The Teranet HPI index tracks home prices over time for repeat sales, so properties with at least two sales are required in the calculations. The report did not provide actual prices.

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Contact the Jeffrey Team for more information – 416−388−1960

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Laurin and Natalie Jeffrey are Toronto real estate agents. We would be happy to help you find your new Toronto home — be it house or condo or loft. We would also be more than pleased to help you sell your current Toronto property.

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Natalie Email: natalie@jeffreyteam.com

The vast majority of content on this blog is not written by Laurin or Natalie Jeffery. It is written by many different authors, for many different publications and websites.

We re-print these articles here as a collection of Toronto real estate news and information. We aim for this blog to be a one-stop shop for people looking for information on Toronto real estate.

We do not claim any of the information we did not write as our own. We do not work for any publication, nor any builder. We are Registered Real Estate Sales People working for Century 21 Regal Realty Inc. Brokerage.