Canada

Canadian Real Estate Prices Hit Pause As Vancouver Falls From Record: National Bank

Canadian real estate prices have been on an epic run, but they’re starting to lose a little steam. The TeranetNational Bank of Canada House Price Index (TNBC HPI) showed minor growth in September. The annual rate is still elevated, but it fell from the record high due to the month dragging. Last month’s gain was the smallest since January 2020, with Vancouver even dropping from its record high.

Canadian Home Price Growth Back To Pre-Pandemic Levels

The C11, an index of the 11 largest real estate markets in the country, showed slowing price growth. The index showed monthly growth of 0.1% in September. Last month was the fourth consecutive deceleration for monthly movements. It also happened to be the smallest monthly gain since January 2020. We’re finally back to pre-pandemic growth — at least on a monthly basis.

Canadian Home Price Growth Falls To 20 Month Low

The monthly change to the Teranet-National Bank HPI.

Annual growth is still lofty and just off the record highs, but last month was a big drag. Last month put an end to fourteen months of acceleration for annual growth. Growth is still so high, the news of a slowdown might not trickle to smaller markets for a while.

National Bank economist Daren King said, “prices remain up 10% or more in 87% of the 32 urban areas surveyed, even though some extremely hot markets are beginning to cool.” 

Fewer Canadian Real Estate Markets Are Reporting Large Growth

The share of urban markets with prices up 10% or higher from last year, compared to those with 30% and higher gains.

Canadian Real Estate Prices Advanced In 8 Big Markets

The C11 index showed small monthly growth for September, but home prices still grew — led by 8 of the 11 cities. Winnipeg (1.0%), Victoria (0.6%), Toronto (0.4%), Quebec City (0.4%), Halifax (0.4%), Hamilton (0.3%), Edmonton (0.3%) and Calgary (0.2%) all showed price growth. Those are all substantial rates of growth, just not as big as it has been the past few months. For example, Toronto’s monthly growth wasn’t enough to prevent annual growth from tapering.

Vancouver and Ottawa Real Estate Fall From Record Highs

The other three cities in the C11 were the drag for the index, falling from records made just a month before. Montreal did the best in this cohort — virtually flat in September. Vancouver (-0.3%) and Ottawa (-0.4%) weren’t so lucky, both falling from their record highs made in August. The deceleration isn’t believed to be a problem, but normalization of price growth.

“All in all, barring a more significant rise in mortgage rates, we do not foresee a downward trend in prices in the coming months,” said King. You’re thinking about those inflation numbers now, aren’t you?

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