Teranet House Price Index - March 2009 - Monthly Report

A national downtrend, less pronounced in Montreal

Canadian home prices in January were down 2.4% from a year earlier, according to the Teranet–National Bank National Composite House Price Index™. As the chart below shows, this reading extends and deepens the home-price disinflation that began last February. It confirms that in early 2009, after more than five years of seller’s-market conditions, Canadian housing as a whole was a buyer’s market. January was also the fifth straight month in which the composite index was down from the month before, extending the first run of consecutive monthly declines since March 2007. The composite index is now down 5.5% from its peak of last August.

Of the six constituent city indices, three were down from a year earlier: Calgary (−8.2%), Vancouver (−4.2%) and Toronto (−2.4%). Two others were still up from a year earlier but by much less than last month: Ottawa (2.1%) and Halifax (1.2%). The sixth city, Montreal, also showed deceleration but maintained a respectable 12-month increase of 4.1%.

In another indication of the recent downtrend, each of the six city indices was down from its all-time high of last year (or 2007 for Calgary). However, they have not been moving in lockstep. The Calgary index was down from the month before in 14 of the last 17 months, with seven straight declines from last July through January. January was also a seventh consecutive month of decline for Vancouver. For Toronto it was the fifth, for Ottawa the third and for Halifax the second (the fourth in five months). Montreal’s index peaked in September, fell for three months in a row, then edged up 0.1% in January.

The historical data of the Teranet–National Bank House Price Index™ is available at http://www.housepriceindex.ca/.

Calgary -11.4% from peak

Halifax -3.5% from peak

Montreal -0.4% from peak

Ottawa -3.6% from peak

Toronto -6.1% from peak

Vancouver -8.3% from peak

National Composite -5.5% from peak.

By : Marc Pinsonneault, Senior Economist Economic & Strategy Team, National Bank Financial Group