Teranet: Canadian Real Estate Prices Get A Third Straight Decline, Led By Toronto

Teranet - Canadian Real Estate Prices Get A Third Straight Decline, Led By Toronto

Canadian real estate prices slipped for another month in a row. Numbers from the Teranet, the operator of multiple provincial land registries, shows a third consecutive decline for urban home prices in November. Most of the decline in the index was due the largest component, Toronto, which printed another substantial loss.

Source: Teranet-National Bank of Canada.

Canadian Real Estate Declines

The Teranet-National Bank 11 City Composite saw another monthly decline. Prices dropped 0.47% in November, but still remain 9.19% higher than the same month last year. Prices are down 2.22% from peak home prices, which was achieved in August 2017. This is the third consecutive decline for the national composite, due largely to declines in Toronto – the largest component of the index.

Source: Teranet-National Bank of Canada.

Toronto Real Estate Declines

Speaking of Toronto, prices slid once again in November. Prices declined 1.42% in November, but still remain 10.65% higher than the same month last year. Home prices are still down 7.14% from the peak of prices, which was hit in July 2017. Toronto received it’s fourth consecutive decline in home prices according to Teranet.

Source: Teranet-National Bank of Canada.

Vancouver Real Estate Is Virtually Flat

Vancouver real estate another all-time high, but the growth was much more conservative. Home prices saw just a 0.04% increase in November, making prices 13.54% higher than the same month last year. The city’s real estate market is currently at peak, following its sixth consecutive rise in row.

Montreal Real Estate Makes The Biggest Jump In The Country

Montreal real estate saw the largest climb of any city in the urban index. Home prices rose 1.04% in November, and are now up 6.71% compared to the same month last year. The city is currently at an all-time high, following a third consecutive price increase.

Calgary Real Estate Climbs, Still Below Peak

Calgary real estate made a solid jump in November, making the third highest increase in the composite. Prices rose 0.7%, bringing prices 1.82% higher than the same time last year. Home prices still remain 2.16% below peak prices, which was hit in October 2014. Yes, if you bought in October 2014 in Calgary, you’re still below purchase price. Although it’s getting pretty close to positive territory.

Worth noting that some argue that Teranet data lags the market, but it’s highly accurate. Teranet uses the land registry, which includes all completed sales. This is opposed to real estate board data, whose monthly reports include sales processed through the MLS that month. One’s not better than the other, but they are different – so it’s worth adding both points to your analysis arsenal.

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  • loyal reader 6 years ago

    Hi Better Dwellings, please stop just posting data. I read your website and other outlets to get insight not just numbers. I would suggest changing your format to add more expert opinion and analysis. Thanks.

    • Rui 6 years ago

      yeah sure. “expert” opinion and analysis from a biased viewpoint. The numbers are more accurate than what an “expert” will tell you

      • bluetheimpala 6 years ago

        Loyal reader? Hmmmm…This site isn’t about sound bites that some idiot journalist/RE agent/banker can toss into their article/pitch/report to get eyeballs on it and act like they are in ‘the know’.

        That is the problem with the society right now; salacious headlines with no data/substance.

        If you want that then go piss off to a mass media website or better yet, sell your house and rent so you don’t have to be bothered with this sort of thing. No one is going to tell you what to do my friend and adding ‘opinion and analysis’ by its very nature adds biase. Data is not biased and the writers here do everything in their power to explain the complex concepts.

        Sorry, I don’t mean to be a dick but what you want, this site will/should never offer.

        • Better Dwelling 6 years ago

          Our bad here, we do normally give a little more explanation as to what the data means. Not necessarily as an interpretation, but even with Teranet data we normally at least give an explanation as to why you should care about Teranet’s numbers, and when they’re useful.

          You’re a regular reader, so I’m sure you know (or knew before) what to expect from these numbers. Not everyone is in the same boat, so our bad.

          BTW, Thanks for your readership, Bluetheimpala! Your comments are always a welcome contribution to the discussion.

    • Better Dwelling 6 years ago

      Thanks for the feedback!

      We’ll ask authors to add some analysis to future data releases. It’s definitely sub-optimal for millennial readers to understand what these numbers mean, so we do apologize to anyone that didn’t get what they were expecting here. We’ll make sure our next post dives deeper, and is a little more helpful.

      We do have a number of experts that are regular readers. Perhaps they’ll give their read on what they’re seeing in these numbers. Actually, we invite any expert that may want to provide feedback on future issues to send us an email at [email protected], and letting us know.

      TL;DR Sorry about the lack of analysis here, and we’ll add some kick ass analysis on posts going forward.

  • C 6 years ago

    Royal LePage announced prices will rise next year. Better Dwelling has posted stats showing price declines, while mortgage debt and refinancing is growing. Am I to understand correctly that our country expects any growth when all future generations will have enormous mortgages, that are basically making the payments of others debt binges?
    If I refinance my home to pay for cars, or trips, or retirement, and my kids buy my home for the over-inflated price, they are now forced to pay for my debt, financed over 25 years. And they won’t have any extra money to pay for any extras in their lives. Better Dwelling already did the stats, and wages are not going to increase enough to warrant the prices of houses. Bloomberg had an article today talking about mortgage debt and refinancing . And yes, over-extended homeowners are lurking in the shadow banking industry, and arrears are much higher there. If homeowners today can’t afford their homes, how are future generations expected to buy these homes and afford them?
    Where is this going to end?

    • MH 6 years ago

      Well, when people can no longer make mortgage payments and take a second mortgage from a private lender at 10.5% and it’s called “get one of her clients out of a housing-fueled debt hole”, you know where it’s gonna end…

      But there is no need to worry, unlike what happened in 2008 it’s all “prime”, there is nothing to see here… Here is the article BTW:


      • Dennis 6 years ago

        Starting Jan 2, 2018 I will personally loan out money at 15% as a second mortgage up to 65% LTV.
        You want to borrow at 15% for asset that is dropping in value and is cash negative this is up to you.
        I will also take the property if you get behind and charge you thousand is admin fees.

    • Dan Duran 6 years ago

      It’s going to where it always has been. In the mid 90’s prices were 10X those from 30 years before. You could buy a bungalow in Leaside for $25k in ’65, $250k in ’95 and I’ll let you guess how much they might cost in 2025. And those who bought at the inflated prices in ’95 did OK.. BTW, have they put all that money in gold, it would still buy the same hose today. Think about it.

      • C 6 years ago

        Ok, what was the debt to income ratio at those times? How many of the mortgages had 2nd mortgages? What was the level of homeownership at those times? Are you suggesting that these homes will be 2.5 million in 8 years? OK, and who is paying for this home for the next 21-25 years (assuming they make all of their payments on time, and never refinance)? And then this house should, according to your calculations, raise another 10X over that time frame? So, at the end of the end of their mortgage are you suggesting that home is now worth 25 million???? Now please don’t make me guess, math is hard for me, how much are you predicting housing will be worth in 2025 and 2055????

        Uh huh, and if that does happen, how much “equity” do you suppose those homeowners will tap into (25 million is a lot of money)–and just will the average mortgage payment be on a 25 million dollar home with one or possibly two mortgages on it? I presume you also have the same generous predictions for wages!

        Correct me if I’m wrong, but you did ask me to guess…….

        • bluetheimpala 6 years ago

          Ding ding ding…we have a weeenner…you are on the money (pun intended!). The looming issue isn’t the cost of housing but the underlying debt. If a house costs a millie but we all made a $250K, no problemo. That is not the case and the older generation is bank rolling irrational asset inflation that is unsustainable.
          Large home equity line of credits in the 90s, I’m guessing, weren’t even available and definitely not doled out like tick tacks. The idea of taking out money against your house so ‘billy can live in a condo downtown and be awesome’ was non existent. My father took out a second mortgage in the 90s to renovate and buy a harley…JOKE…to infuse cash into a business and it was a struggle to get the banks to help at all.

          I don’t believe history can save us and similar to the sub-prime recession, I suspect there are more layers to the onion (shadow banking, familiar/peer/community banking, asset fraud, etc) that we have yet to realize and until the house of cards begins to fall we won’t understand the exposure.

          • J 6 years ago

            we don’t all have to make 250k (even though a lot of people are already making this amount).
            “there only needs to be enough people making 250k to eat up the supply of house currently on the market” in other words, house is a commodity that will simply go to the higher bidder. it’s not for everyone.

            I am not going to make prediction where the price is going because it’s pointless. all I can say is that for middle class, real estate is the easiest form of investment. Especially in the immigrant community, most of my friends have 4-5 rental properties in the family. We don’t have strong connections and deep root in this country, we don’t know other forms of investment.

            as long as they didn’t buy this year, they are ok

        • AnOnlineCommenter 6 years ago

          C – “Ok, what was the debt to income ratio at those times? How many of the mortgages had 2nd mortgages? What was the level of homeownership at those times? Are you suggesting that these homes will be 2.5 million in 8 years? OK, and who is paying for this home for the next 21-25 years (assuming they make all of their payments on time, and never refinance)?”

          Part of the disappearing middle class isn’t people sliding into the lower income range. There are more people moving into the higher income bracket too. People don’t talk about this group much, but without them, this pony show would’ve ended awhile ago.

        • Tommy 6 years ago

          You could make the same argument for cities like NYC and London. Very few can afford to buy there while ownership rates in Toronto are still very high. What will happen is less people will be able to buy in the future, and more people will rent. The wealthy class will get wealthier (and we will no doubt import many new wealthy people into the city to participate), and the rest will become lifelong renters. The dream of home ownership will be just a dream like it is in most major cities. That is all.

      • Alistair McLaughlin 6 years ago

        Rates have been falling for 30 years. Do you think they will fall for another 30 years?

      • C 6 years ago

        Since you didn’t reply to me earlier, I would just like to add to your post so that others out there reading it, don’t get fooled by your comments.

        1989-Homeowner 25 years old (Mortgage Free at 50)
        House Price-135 000.00 Value-135 000.00
        5 year fixed interest rate-12.24%
        25 year amortization
        Monthly Payment-$1415.78

        Same homeowner who has “refinanced”

        2017-Homeowner 53 years old (Mortgage Free at 78???)
        Mortgage Amount-200 000.00 Value of Home-400 000.00
        5 year fixed interest rate-4.99%
        25 year amortization
        Monthly Payment-1162.07

        2017-Homeowner 53 years old (Mortgage Free at 78???)
        Mortgage Amount 320 000 (80% of value of home) Value of Home-400 000.00
        5 year fixed interest rate-4.99%
        25 year amortization
        Monthly Payment-1859.31

        These are true stats from my family member. Yeah sure, the “value” of homes may have increased, but so the level of indebtedness. Now imagine that this figure is in the billions, and you go ahead and tell yourself that everyone who bought in the early 90’s is just fine.

        And I have two kids entering college in the next 2-4 years and the full time workforce in the next 4-6. Good to know they will be looking at mortgage payments in excess of 2000.00 per month for housing– to finance their aunts trips to Mexico, and shopping in Grove City.

        • Tommy 6 years ago

          Your kids won’t be looking at mortgage payments. They will rent for life, or if they’re lucky, they will inherit your house. Since you have two kids, they will sell it once you’re gone, split the funds, and continue renting.

      • bluetheimpala 6 years ago

        Troll alert! Troll alert!

      • Ian St Martin 6 years ago


        That’s an interesting observation. I’ll add my own: 29 years ago (myself), a university graduate with a starting software engineering job was was paid around $40,000 CDN, working out of either Toronto or Vancouver. Today that same graduate will earn, generously, $60,000 CDN. How is is that wages can go up 50% every 30 years while house prices can go up 1000%. Can that happen in perpetuity?

        • Tommy 6 years ago

          Prices will hit a brick wall at some point, but at that price point, it will already be too expensive for most average earners – just like it is in NYC. They will settle on renting instead of owning. The idea of owning in Toronto is an archaic one that needs to die a quick death. This is the natural progression of growing cities.

      • Neo 6 years ago

        Dan Duran,

        Of course anyone who bought in the GTA in 1995 did ok. The market bottomed in 1996. The problem were people who bought in 1989. Those homeowners didn’t see 1989 prices again until 2002 (or longer if you account for inflation). The question remains if 2017 is the equivalent of 1989. Time will tell.

        • Tommy 6 years ago

          I think 2017 is unlike 1989. It’s more like NYC in 2008. Ripe for a dip but then a climb back to par. Toronto reached its moment in 2002 – the run-up which has been unabated similar to NYC coming off the late 70s when it was a hole, but was transformed into the gleaming city it is today. Even the fine details like the stripclubs that used to line Time Square are akin to the stripclubs on Yonge that are on their last legs.

          Anyone that thinks home prices will become affordable for Joe Public in Toronto ever again is reminiscent of the people in the early 2000s that decided to wait on buying a home and sat on the sidelines hoping for a crash that never came. They’re now priced out indefinitely, having to settle for inferior housing if they can buy at all.

          • Neo 6 years ago

            Yes Tommy….To the moon…We get your position. I don’t agree.

  • M. 6 years ago

    Yea I agree,we should be able to spend on other things, to keep the economy going.if the present and future youth have to spend all there money on housing what happens to the rest of the economy. The wealth has to be spread around. Maybe the new government will free up some of the green space as well.

    • Better Dwelling 6 years ago

      Any concentration of employment is somewhat dangerous to the broad economy, whether the wealth is concentrated in housing, retail, banking, or government. Economies are better off diversified, just like everyone’s portfolios! 😀

  • Irving F. 6 years ago

    Housing has reached a new, permenantly high plateau. We will not a see a deline in current price levels any time soon, iif ever. Expect to see real estate prices a good deal higher within a few months.

    • bluetheimpala 6 years ago

      Lol…go home Irving, you’re drunk.

    • Tim 6 years ago

      LOL. yah maybe some of you should go talk to the “busy residential real estate lawyers”. those who specialize in “pre construction. ” whoops, did i just let the cat out of the bag……

      Whats this? growing number of speculators have no exit strategy as assignment clauses were removed or not included for some developments? whats this? the banks aren’t approving/accepting many of these buyers now who are on the hook for mega mortgages. Huh? they cant afford them NOW? lol, growing number of pre construction deals (for certain developments) are piling up on desks and some of these sellers are actually considering walking? losing down payment or worse forced to hold until later in 2018 – 2019 where who knows where the price will and forced to borrow at much much higher rates? WHAT? Merry Xmas all. DO YOUR OWN DUE DILIGENCE.

      • Tommy 6 years ago

        If prices of those condos come crashing down, there are 300k more people entering the city in the next few years to buy them.

        • Lessdenadalla 6 years ago

          LOL … the fact is less than 4% of those newcomers arrive here with enough money to make a real estate purchase … those are wealthy ones. The rest are struggling for years like all immigrants do.

  • Meghan Markle's T.O. home, prices may be rising, potential land shortage 6 years ago

    […] Teranet: Canadian Real Estate Prices Get A Third Straight Decline, Led By Toronto (Better Dwelling) […]

  • Toronto Home Owner 6 years ago

    This article is FAKE NEWS.

    The percentage of subprime loans in the US between 2002-2006 went from 8% to 20%.

    Where is the author getting these facts? The crisis was called a subprime crisis for a reason.

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