Teranet Index: September 2010

NOVEMBER 2010

Price declines in all six markets in September Canadian home prices in September were down 1.1% from the previous month, according to the Teranet-National Bank National Composite House Price Index™. The monthly decline ended a string of 16 consecutive increases in the composite index since the last monthly deflation in April 2009. For the first time since February 2009, prices fell in all six of the metropolitan markets surveyed. The declines were 2.4% in Halifax, 2.2% in Calgary, 1.6% in Toronto, 0.5% in Ottawa and 0.3% in Montreal and Vancouver. For Vancouver it was the third consecutive monthly decrease and for Calgary it was the second. This result was reflected in a further deceleration of the 12-month price increase in September, to 7.9% for the composite index. It was the third consecutive month of deceleration, leaving the 12-month rise the smallest since last January. The 12-month increases range quite widely from market to market: 9.2% in Vancouver and Ottawa, 9.0% in Toronto, 7.6% in Montreal, 3.6% in Halifax and 1.7% in Calgary. Teranet – National Bank National Composite House Price Index™ Contact Us For general enquiries: info@housepriceindex.ca For licenses covering all index-linked products, please contact: Simon Côté 514 879-5379 Website www.housepriceindex.ca

In October, according to our calculations based on data from the Canadian Real Estate Association, market conditions were balanced in Canada as a whole, with Calgary presenting a buyer's market. Teranet – National Bank House Price Index™ The historical data of the Teranet – National Bank House Price Index™ is available at www.housepriceindex.ca. Metropolitan area Index level September % change m/m % change y/y Calgary 156.89 -2.2 % 1.7 % Halifax 128.07 -2.4 % 3.6 % Montreal 135.67 -0.3 % 7.6 % Ottawa 132.64 -0.5 % 9.2 % Toronto 125.98 -1.6 % 9.0 % Vancouver 154.84 -0.3 % 9.2 % National Composite 137.94 -1.1 % 7.9 % The Teranet–National Bank House Price Index™ is estimated by tracking observed or registered home prices over time using data collected from public land registries. All dwellings that have been sold at least twice are considered in the calculation of the index. This is known as the repeat sales method; a complete description of the method is given at www.housepriceindex.ca The Teranet–National Bank House Price Index™ is an independently developed representation of average home price changes in six metropolitan areas: Ottawa, Toronto, Calgary, Vancouver, Montreal and Halifax. The national composite index is the weighted average of the six metropolitan areas. The weights are based on aggregate value of dwellings as retrieved from the 2006 Statistics Canada Census. According to that census1, the aggregate value of occupied dwellings in the metropolitan areas covered by the indices was $1.168 trillion, or 53% of the Canadian aggregate value of $2.207 trillion. All indices have a base value of 100 in June 2005. For example, an index value of 130 means that home prices have increased 30% since June 2005. By: Marc Pinsonneault Senior economist Economy & Strategy Group National Bank Financial Group Teranet - National Bank House Price Index™ thanks the author for their special collaboration on this report. 1 Value of Dwelling for the Owner-occupied Non-farm, Non-reserve Private Dwellings of Canada.

Teranet Index - November 2010

JANUARY 2011

Third consecutive monthly price decline in November Canadian home prices in November were down 0.2% from the previous month, according to the Teranet-National Bank National Composite House Price Index™. This retreat followed monthly declines of 0.4% in October and 1.1% in September after a run of 16 consecutive increases. November prices were down from the previous month in four of the six metropolitan markets surveyed. Declines of 0.9% in Ottawa and 0.5% in Toronto were each the third in a row. The Calgary decline of 0.7% was the fourth in a row. Halifax prices were down 0.8%. Montreal prices were again flat from the month before. Prices in Vancouver were up 0.6%. After three consecutive months of decline in the composite index, Canadian home prices are still 4.8% above the pre-recession peak of August 2008. Teranet – National Bank National Composite House Price Index™ Contact Us For general enquiries: info@housepriceindex.ca For licenses covering all index-linked products, please contact: Simon Côté 514 879-5379 Website www.housepriceindex.ca

The November result was reflected in a further deceleration of the 12-month rise of the composite index, to 4.9%. It was the fifth consecutive month of deceleration, leaving the 12-month increase the smallest since December 2009. Market by market, the 12-month changes range quite widely: increases of 7.2% in Ottawa, 7.1% Montreal, 5.9% in Vancouver, 5.1% in Toronto and 2.7% in Halifax, with a decrease of 1.5% in Calgary. Data from the Canadian Real Estate Association show generally balanced conditions in major urban markets in December. Toronto and Vancouver could even be considered sellers' markets. Teranet – National Bank House Price Index™ The historical data of the Teranet – National Bank House Price Index™ is available at www.housepriceindex.ca. Metropolitan area Index level November % change m/m % change y/y Calgary 154.21 -0.7 % -1.5 % Halifax 127.91 -0.8 % 2.7 % Montreal 135.56 0.0 % 7.1 % Ottawa 131.07 -0.9 % 7.2 % Toronto 124.21 -0.5 % 5.1 % Vancouver 155.90 0.6 % 5.9 % National Composite 137.07 -0.2 % 4.9 % The Teranet–National Bank House Price Index™ is estimated by tracking observed or registered home prices over time using data collected from public land registries. All dwellings that have been sold at least twice are considered in the calculation of the index. This is known as the repeat sales method; a complete description of the method is given at www.housepriceindex.ca The Teranet–National Bank House Price Index™ is an independently developed representation of average home price changes in six metropolitan areas: Ottawa, Toronto, Calgary, Vancouver, Montreal and Halifax. The national composite index is the weighted average of the six metropolitan areas. The weights are based on aggregate value of dwellings as retrieved from the 2006 Statistics Canada Census. According to that census1, the aggregate value of occupied dwellings in the metropolitan areas covered by the indices was $1.168 trillion, or 53% of the Canadian aggregate value of $2.207 trillion. All indices have a base value of 100 in June 2005. For example, an index value of 130 means that home prices have increased 30% since June 2005. By: Marc Pinsonneault Senior Economist Economy & Strategy Group National Bank Financial Group Teranet - National Bank House Price Index™ thanks the author for their special collaboration on this report. 1 Value of Dwelling for the Owner-occupied Non-farm, Non-reserve Private Dwellings of Canada.

Teranet House Price Index - August 2010

OCTOBER 2010

Monthly price rise of 0.2% in August Canadian home prices in August were up 10.4% from a year earlier, according to the Teranet-National Bank National Composite House Price Index™. It was the smallest 12-month gain in six months. The metropolitan markets showing a similar deceleration included Toronto and Vancouver, though their price increases from a year earlier were still in the neighbourhood of 12%. For Ottawa, the market where prices have risen most in the last six months, the 12-month increase was 10.7%. In the other three markets the 12-month gains were more modest: 7.7% in Montreal, 6.8% in Halifax, 5.0% in Calgary. Teranet – National Bank National Composite House Price Index™ Contact Us For general enquiries: info@housepriceindex.ca For licenses covering all index-linked products, please contact: Simon Côté 514 879-5379 Website www.housepriceindex.ca

For a second consecutive month, prices did not rise from the month before in all six markets. The Calgary index was down 0.5% from June and the Vancouver index 0.4%. For Vancouver it was the second monthly decline in a row. In Toronto the monthly rise was 0.4%, the smallest in five months. In Montreal it was 0.5%, in Halifax 0.9% and in Ottawa 1.4%. For the composite index as a whole the monthly increase in August was 0.2%, the smallest since the index began climbing 16 months ago. The uninterrupted string of 16 monthly gains exceeds the 14-month run of August 2005 through September 2006. Teranet – National Bank House Price Index™ The historical data of the Teranet – National Bank House Price Index™ is available at www.housepriceindex.ca. Metropolitan area Index level August 2010 % change m/m % change y/y Calgary 160.40 -0.5 % 5.0 % Halifax 131.19 0.9 % 6.8 % Montreal 136.10 0.5 % 7.7 % Ottawa 133.32 1.4 % 10.7 % Toronto 128.00 0.4 % 12.5 % Vancouver 155.37 -0.4 % 11.8 % National Composite 139.43 0.2 % 10.4 % The Teranet–National Bank House Price Index™ is estimated by tracking observed or registered home prices over time using data collected from public land registries. All dwellings that have been sold at least twice are considered in the calculation of the index. This is known as the repeat sales method; a complete description of the method is given at www.housepriceindex.ca The Teranet–National Bank House Price Index™ is an independently developed representation of average home price changes in six metropolitan areas: Ottawa, Toronto, Calgary, Vancouver, Montreal and Halifax. The national composite index is the weighted average of the six metropolitan areas. The weights are based on aggregate value of dwellings as retrieved from the 2006 Statistics Canada Census. According to that census1, the aggregate value of occupied dwellings in the metropolitan areas covered by the indices was $1.168 trillion, or 53% of the Canadian aggregate value of $2.207 trillion. All indices have a base value of 100 in June 2005. For example, an index value of 130 means that home prices have increased 30% since June 2005. By: Marc Pinsonneault Senior Economist Economy & Strategy Group National Bank Financial Group Teranet - National Bank House Price Index™ thanks the author for their special collaboration on this report. 1 Value of Dwelling for the Owner-occupied Non-farm, Non-reserve Private Dwellings of Canada.

Intrade Bets on Vancouver Housing

The poster Austin over at Realestatetalks has taken the initiative to set up an Intrade bet on the Teranet Vancouver HPI. Here are the two contracts:

https://www.intrade.com/jsp/intrade/common/c_cd.jsp?conDetailID=734327&z=1282235580558

This market is based on the monthly Teranet National Bank National Composite House Price Index for Vancouver (from the map on the main page click on the Vancouver pin to see the latest Vancouver index value).

The contract will settle (expire) at 100 ($10.00) if the monthly Index for Vancouver is 121 or less before the end of 2013.

The contract will settle (expire) at 0 ($0.00) if the monthly Index for Vancouver is not 121 or less before the end of 2013.

The index for each month, up to and including December 2013, will be reviewed when published. If the monthly index is 121 or less the contract will be expired at 100. If not the contract will be expired at 0 once the index for December 2013 is published.

And another:

https://www.intrade.com/jsp/intrade/common/c_cd.jsp?conDetailID=734326

This market is based on the monthly Teranet National Bank National Composite House Price Index for Vancouver (from the map on the main page click on the Vancouver pin to see the latest Vancouver index value).

The contract will settle (expire) at 100 ($10.00) if the monthly Index for Vancouver is 143 or less before the end of 2010.

The contract will settle (expire) at 0 ($0.00) if the monthly Index for Vancouver is not 143 or less before the end of 2010.

The index for each month, up to and including December 2010, will be reviewed when published. If the monthly index is 143 or less the contract will be expired at 100. If not the contract will be expired at 0 once the index for December 2010 is published.

These bets can behave weird if volumes are low. However if Vancouver residents and outsiders are in a betting mood, this trade could really take off. Place your bets (if you dare!) and good luck. I'll do a bit of analysis of the potential directions and values of the Teranet HPI, in the next 4 months and the next 2 years, in some upcoming posts.

Teranet's report from May 2010 Vancouver index = 155.23.

A value of 143 on December 2010 would equate to an average 1.17% monthly drop for the remainder of the year or a 7.9% drop from May 2010.

A value of 121 on December 2013 would equate to an average 0.58% monthly drop or a 22.1% drop from May 2010.

The June 2010 report will be out in about a week's time.

Teranet HPI for March 2010

Monthly price rise of 0.3% in March Canadian home prices in March were up 11.6% from a year earlier, according to the Teranet-National Bank National Composite House Price Index™. This acceleration from 12-month rises of 7.5% in January and 9.9% in February is attributable to the deflation that was in progress 12 months earlier. This base effect will continue through the results for April, the anniversary of the index bottom. The composite index in March was up 11.7% from that bottom. However, this gain is strongly influenced by Toronto, up 16.3% from April 2009, and Vancouver, up 14.4% from May 2009. In the four other markets surveyed, the rise from the respective troughs is less than 9%. Month-over-month increases have recently decelerated considerably. The February and March gains of the composite index, at 0.2% and 0.3%, were the smallest in the 11 months since it began reflating. Contributing to the deceleration was a string of three consecutive monthly declines in Calgary, where March prices were down 0.3% from the month before. Teranet – National Bank National Composite House Price Index™ Contact Us For general enquiries: info@housepriceindex.ca For licenses covering all index-linked products, please contact: Simon Côté 514 879-5379 Website www.housepriceindex.ca

Toronto prices were flat in March. Prices were up 0.1% in Ottawa, 0.6% in Montreal and Vancouver and 1.4% in Halifax. The broad slowing of monthly gains is consistent with a general loosening of resale-market conditions across the country. For some months now, homes have been coming on the market faster than they have been selling. Of the six metropolitan markets surveyed, Calgary remains the only one that has yet to top its pre-recession high. Its prices are down 10.3% from their peak of August 2007. Teranet – National Bank House Price Index™ The historical data of the Teranet – National Bank House Price Index™ is available at www.housepriceindex.ca. Metropolitan area Index level March 2010 % change m/m % change y/y From trough Trough Date Calgary 157.17 -0.3 % 2.7 % 6.0% June 2009 Halifax 124.99 1.4 % 5.8 % 6.9% February 2009 Montreal 129.22 0.6 % 7.1 % 7.2% February 2009 Ottawa 122.04 0.1 % 7.9 % 8.5% April 2009 Toronto 120.94 0.0 % 15.5 % 16.3% April 2009 Vancouver 152.16 0.6 % 14.4 % 14.8% May 2009 National Composite 133.47 0.3 % 11.6 % 12.0% April 2009 The Teranet–National Bank House Price Index™ is estimated by tracking observed or registered home prices over time using data collected from public land registries. All dwellings that have been sold at least twice are considered in the calculation of the index. This is known as the repeat sales method; a complete description of the method is given at www.housepriceindex.ca The Teranet–National Bank House Price Index™ is an independently developed representation of average home price changes in six metropolitan areas: Ottawa, Toronto, Calgary, Vancouver, Montreal and Halifax. The national composite index is the weighted average of the six metropolitan areas. The weights are based on aggregate value of dwellings as retrieved from the 2006 Statistics Canada Census. According to that census1, the aggregate value of occupied dwellings in the metropolitan areas covered by the indices was $1.168 trillion, or 53% of the Canadian aggregate value of $2.207 trillion. All indices have a base value of 100 in June 2005. For example, an index value of 130 means that home prices have increased 30% since June 2005. By: Marc Pinsonneault Senior Economist Economy & Strategy Group National Bank Financial Group Teranet - National Bank House Price Index™ thanks the author for their special collaboration on this report. 1 Value of Dwelling for the Owner-occupied Non-farm, Non-reserve Private Dwellings of Canada.

January 2010 Teranet House Price Index

MARCH 2010

The smallest monthly increase since prices began rising Canadian home prices in January were up 7.5% from a year earlier, according to the Teranet-National Bank National Composite House Price Index™. January was the fourth consecutive month in which prices were up from a year earlier, after 10 consecutive months of 12-month deflation. The turnaround is due to nine straight monthly increases in the countrywide index. However, January's 0.5% monthly gain was the smallest so far. Teranet – National Bank National Composite House Price Index™ Contact Us For general enquiries: info@housepriceindex.ca For licenses covering all index-linked products, please contact: Simon Côté 514 879-5379 Website www.housepriceindex.ca

For the first time in nine months, none of the six metropolitan markets surveyed showed a monthly increase of as much as 1%. The rise was 0.9% in Vancouver, 0.7% in Toronto, 0.6% in Halifax, 0.4% in Montreal and 0.3% in Ottawa. In Calgary prices declined 0.5%. Prices are now down 9.7% from the previous peak in Calgary and 0.2% in Vancouver. The other four markets passed their pre-recession peaks between May and October last year. The index is now up 9.0% from its April 2009 bottom. This steep rise has been led by Vancouver (up 11.7% from May 2009) and Toronto (11.0% from April 2009). In other markets the increases have been more modest: Calgary 6.7% since June, Ottawa 6.5% since last April, Montreal 3.6% since February 2009, Halifax 1.5% since February 2009. The 12-month appreciation was 9.4% in Toronto, 8.9% in Vancouver, 8.1% in Ottawa, 5.3% in Montreal, 4.6% in Halifax and 1.9% in Calgary. Teranet – National Bank House Price Index™ The historical data of the Teranet – National Bank House Price Index™ is available at www.housepriceindex.ca. Metropolitan area Index level January 2010 % change m/m % change y/y From trough Trough Date Calgary 158.27 -0.5 % 1.9 % 6.7% June 2009 Halifax 122.98 0.6 % 4.6 % 1.5% February 2009 Montreal 128.48 0.4 % 5.3 % 3.6% February 2009 Ottawa 123.17 0.3 % 8.1 % 6.5% April 2009 Toronto 120.44 0.7 % 9.4 % 11.0% April 2009 Vancouver 150.39 0.9 % 8.9 % 11.7% May 2009 National Composite 132.86 0.5 % 7.5 % 9.0% April 2009 The Teranet–National Bank House Price Index™ is estimated by tracking observed or registered home prices over time using data collected from public land registries. All dwellings that have been sold at least twice are considered in the calculation of the index. This is known as the repeat sales method; a complete description of the method is given at www.housepriceindex.ca The Teranet–National Bank House Price Index™ is an independently developed representation of average home price changes in six metropolitan areas: Ottawa, Toronto, Calgary, Vancouver, Montreal and Halifax. The national composite index is the weighted average of the six metropolitan areas. The weights are based on aggregate value of dwellings as retrieved from the 2006 Statistics Canada Census. According to that census1, the aggregate value of occupied dwellings in the metropolitan areas covered by the indices was $1.168 trillion, or 53% of the Canadian aggregate value of $2.207 trillion. All indices have a base value of 100 in June 2005. For example, an index value of 130 means that home prices have increased 30% since June 2005. By: Marc Pinsonneault Senior Economist Economy & Strategy Group National Bank Financial Group Teranet - National Bank House Price Index™ thanks the author for their special collaboration on this report. 1 Value of Dwelling for the Owner-occupied Non-farm, Non-reserve Private Dwellings of Canada.