Canadian Home Prices Fall For 6th Consecutive Month, First March Outside of Recession



Canadian real estate price growth is still slowing, according to land registry data. The TeranetNational Bank House Price Index (TNB HPI) show prices fell for the first time in March, outside of recession. The drop represents the sixth consecutive monthly decline for Canadian real estate markets.

Teranet-National Bank House Price Index (TNB HPI)

Regular readers can skip this, but for new readers here’s a little about today’s numbers. The Teranet-National Bank House Price Index (TNB HPI), is a partnership between private land registry behemoth Teranet, and National Bank of Canada. The index is similar to the CREA HPI, but the measurements are taken at different times. This can result in very different numbers.

The Teranet HPI and CREA HPI measure different data sets, at different times. The Teranet HPI measures at the land registry, meaning they only use completed sales. CREA HPI measures at the MLS, which uses the point of sale, typically before the transfer. In a normal market, there’s probably not much of a difference. The vast majority of real estate sales in major cities occur on the MLS. However, in a volatile market, sales fall through and more “private” transactions occur. The CREA HPI would fail to capture that subtlety, but the Teranet HPI would.

Neither is better or worse, but they are different. Homebuyers not running numbers and depending on their agent probably won’t care. If you’re looking at the numbers professionally or from a macro market perspective, you want to take a peak at both.

Canadian Real Estate Prices Fall A Sixth Month

The C11, an aggregate price index of Canada’s largest cities, show prices declined last month. Prices fell 0.31% in March, but remain 1.53% higher than last year. The index is now down 1.74% from the peak reached in September 2018. The monthly decline was a rare one – the first one for March outside of a recession.

Teranet-National Bank HPI C11 – Annual Change

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

The annual pace of growth continues to decelerate. The 1.53% gain year-over-year is the fourth consecutive month we’ve seen the deceleration. TNB HPI analysts also noted, this is the 6th month in a row prices declined month-over-month. Only one month since the Great Recession printed lower annual gains – August 2018.

Toronto Real Estate Price Are Down Over 4% From Peak

Toronto real estate prices printed a decline for the month as well. Toronto prices fell 0.29% in March, when compared to the month before. Prices are up 3.26% from last year, but still down 4.32% from the July 2017 peak. The annual pace of growth has decelerated for the past 3 consecutive months.

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 Price Are Down Over 4% From Peak

Vancouver real estate is fairing a little worse than Toronto these days. Vancouver prices fell 0.46% in March, when compared to the month before. Prices are down 2.1% from last year, and down 4.31% from the July 2018 peak. This is the 11th consecutive month we’ve seen price deceleration on the annual pace of growth. It’s also the biggest annual decline since June 2013.

Vancouver Real Estate Prices – Teranet-National Bank HPI

Annual percent change of real estate prices in Vancouver.

Montreal Real Estate Prices Hit All-Time High

Montreal real estate prices bucked the trend, printing a new all-time high. Montreal prices increased 0.12% in March, when compared to a month before. Price are now up 5.46% from last year, and currently sit at a new all-time high. The annual pace of growth is far outperforming the national index. However, prices have underperformed the market by 20% since 2005. It’s less of a booming market, and more of one catching up.

Montreal Real Estate Prices – Teranet-National Bank HPI

Annual percent change of real estate prices in Montreal.

Canadian real estate markets are changing direction, after years of higher than normal growth. One notable exception is Montreal, but don’t mix that up with a price boom. The city has long underperformed the national market, and even did worse than suburbs like Hamilton.