Vancouver pushes Canadian house prices lower

By Leith van Onselen

The Teranet-National Bank House Price Index for December has been released, which reported a third consecutive monthly decline in home values:

The Teranet–National Bank National Composite House Price IndexTM for December was down 0.3% from the previous month. It was the third consecutive monthly retreat. The component indexes were down for seven of the 11 metropolitan markets surveyed: Edmonton (−1.4%), Vancouver (−1.2%), Winnipeg (−0.9%), Calgary (−0.6%), Victoria (−0.4%), Hamilton (−0.4%) and Quebec City (−0.4%). Indexes were up for Ottawa-Gatineau (1.0%), Montreal (0.4%), Toronto (0.2%) and Halifax (0.1%).

The recent trend of home prices is clearly downward in most metropolitans markets. For Calgary December was a sixth straight month without an index rise, a cumulative decline of 2.0%; for Vancouver a fifth straight month and a cumulative loss of 2.9%; for Edmonton a fourth straight month and a cumulative loss of 2.7%. For Victoria, Winnipeg and Hamilton it was a third straight month, with cumulative losses of 0.5%, 1.6% and 1.0% respectively. The Halifax index was down 1.6% from five months ago, Quebec City and Toronto were down −0.8% and −0.2% respectively from four months ago. Only the Ottawa-Gatineau and Montreal indexes finished 2018 in strength, rising 7.9% and 4.8% respectively from March to December and both ending the year at all-time highs.

The below charts plot prices across the three biggest markets as well as nationally:

While home values nationally have declined over the past three months, annual price growth has actually bounced back from its post-GFC low.

In the year to December, Canadian home values rose by just 2.5%, up from the post-GFC low of 1.4% in August. The rebound was driven by Toronto, whose annual price growth rebounded to 3.7% from -3.3% in August. Elsewhere, annual price growth was 4.4% in Montreal but has faded to just 1.4% in Vancouver.

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