Teranet: Canadian Real Estate Prices Continue To Decelerate, Smallest Growth Since 2009

Canadian real estate prices gains are decelerating, but that didn’t stop some markets from hitting all-time highs. TeranetNational Bank of Canada House Price Index (Teranet HPI) numbers show Canada’s largest markets saw price gains decelerate. Despite the deceleration, many markets still pushed through to all-time highs for prices.

What’s The Teranet HPI?

The Teranet HPI is an alternative to CREA’s benchmark, for measuring home prices. They both generally provide similar trend directions, but there’s a key difference. Teranet HPI is measured at the transfer, and the CREA benchmark is measured at the point of sale. The advantage of Teranet is accuracy, since they only include completed sales. The disadvantage is it’s not nearly as fast as CREA, since sales typically take time to close. Both have their trade offs and benefits, so it’s worth checking out both if you’re really into real estate.

Canadian Real Estate Prices Decelerate To 2009 Levels

The Teranet HPI C11, a weighted average of Canada’s largest 11 markets, shows lower than normal gains. The C11 increased 0.78% in July, which would be huge if we didn’t normally see an average of 1% historically. The annual price change fell to 1.75%, the smallest growth since 2009. Seasonally adjusted, the C11 is at an all-time high for prices. Unadjusted, the index fell in June, and stayed flat in July.

Teranet-National Bank HPI C11 (Annual Change)

Composite aggregate of home prices in Canada’s 11 largest cities.

Source: National Bank of Canada, Teranet, Better Dwelling.

Toronto Real Estate Sees Biggest Loss Since 2009

Toronto real estate continued to see declines in non-condo segments. The Teranet HPI for all home types increased 0.84% in July, bringing the annual change to a loss of 4.01%. The annual gain is the lowest we’ve seen since July 2009, but there was a positive note. Analysts observed that condo prices reached a new all-time high, bucking the market. This means all losses were reserved for other types of homes.

Toronto Real Estate Prices (Teranet-National Bank HPI)

Annual percent change of real estate prices in Toronto.

Source: National Bank of Canada, Teranet, Better Dwelling.

Vancouver Real Estate Reaches An All-Time High

Vancouver real estate prices reached an all-time high according to the Teranet HPI. Prices increased 0.41% in July, bringing the annual price change to a massive 10.63% from last year. Even though we’re seeing a deceleration of price gains, the market still made a massive gain.

Vancouver Real Estate Prices (Teranet-National Bank HPI)

Annual percent change of real estate prices in Vancouver.

Source: National Bank of Canada, Teranet, Better Dwelling.

Montreal Real Estate Reaches An All-Time High

Montreal real estate prices also reached an all-time high on the Teranet HPI. Prices increased a massive 1.28% in July, outperforming the national average. Prices are now up 4.01% from last year, slightly higher than it was last month. Montreal is one of the few real estate markets seeing increased sale from last year. Price gains have been relatively conservative compared to Canada’s largest markets over the past few years.

Montreal Real Estate Prices (Teranet-National Bank HPI)

Annual percent change of real estate prices in Montreal.

Source: National Bank of Canada, Teranet, Better Dwelling.

The broad deceleration of price gains most likely has to do with non-local factors. Nationally, the market was hit with one of the fastest climbs of interest rates in recent history. Add to that stricter lending at the Big Six, and mortgage stress testing. Each one of these measures shrinks the size of mortgage a household can secure. This makes it more difficult for qualified buyers to absorb rapid price gains.

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  • Ken 6 years ago

    It looks like April 2009 was the peak decline for national levels, and that’s where we’re heading. That doesn’t seem too bad to be honest. Sucks to pay more than you need to, but it’s not the end of the world.

    • Bluetheimpala 6 years ago

      2009 was deemed’the great recession’ with hundreds of billions of value wiped out across basically everything. Our economy is firing on all cylinders and the US is killing it. Other than the Turks having their currency goosed, there isn’t that much obvious strife in the world (ok…we all know the corp bond market may implode and ECB nation debt is messy…)…makes ya think. And I find the other markets being at all-time highs laughable and quite concerning; TO and Southern Ontario, for better or for worse, drive Canada. You can have all of your soft wood and subsidized dairy but at the end of the day, if we are hurting everyone is hurting. We’ll have to keep watching. Tick tock. BD4L.

      • Grizzly Gus 6 years ago

        China is worth keeping an eye on too. Their P2P lending system seems to be falling apart and bigger banks have been more reluctant to lend despite the government easing standards. Not a clear credit crunch or financial crisis yet by any means but bad news seems to piling up

        • Neo 6 years ago

          China just seems to able to keep the debt party going.

  • willy 6 years ago

    There’s also another index that I’m following up on. It’s called RPS house price index i.e. Real Property Solutions by Brookfield Company. They say they’re similar to Teranet. What I noticed though, is that their index is a bit more generous or more on the positive side than Teranet or CREA in terms of price appreciation.

    Anyone heard of the RPS index? If yes what’s the accuracy like?

    • NJ 6 years ago

      //more on the positive side//
      Sounds sponsored content to me.
      No thank you.

  • Andy 6 years ago

    If anyone is looking for private money I can provide first mortgages at 7.99% open loan 3 month to 12 month term.
    Msg for details.

    • Papagorgio 6 years ago

      I’m very interested,good sir. Do you accept transfer with western union to Lagos? I patiently await your response.

    • Gullible Gus 6 years ago

      Will you automatically renew after 12 months if I cant another lender to step in? Might need something more in the 25 year range?

    • NJ 6 years ago

      Poor guy, go get a life.

    • RM 6 years ago

      I really wish there was a way of flagging inappropriate posts. BD moderator, wanna step in here?

Comments are closed.