Canadian housing prices continue to climb, pushed higher by the Toronto market, amid contined low interest rates and falling consumer confidence.
Canadian home prices in August were up 0.9 per cent from the previous month, according to the Teranet-National Bank National Composite House Price Index. It was the ninth consecutive monthly. Six of the 11 metropolitan markets surveyed were also at all-time highs. The monthly increase equalled or exceeded the national average in four markets: Toronto (1.6%), Winnipeg (1.3%), Hamilton (1.0%) and Ottawa-Gatineau (0.9%). The rise was 0.7% in Calgary, 0.6% in Vancouver and Edmonton and 0.3% in Montreal. Prices were flat from the month before in Victoria and Quebec City and down 0.2% in Halifax. Without Toronto, whose August gain was the fourth in a row to exceed 1.5%, the monthly rise of the composite index would be 0.6%.
The 12-month gain of the composite index was 5.4% in August, a second consecutive month of acceleration from previous months. The rise from a year earlier exceeded the national average in Vancouver (9.9%), Winnipeg (7.6%), Quebec City (6.7%), Toronto (6.2%) and Montreal (5.6%). It was below the national average in Ottawa-Gatineau (3.9%), Halifax (2.9%), Hamilton (2.4%) and Calgary (0.8%). The Calgary appreciation broke a nine-month run of 12-month deflation. Prices remained down from a year earlier for a 10th consecutive month in Edmonton (−2.1%) and for a ninth consecutive month in Victoria (−1.2%).
“It is clear that market conditions are favourable to sellers or borderline in the Central regions of the country, namely Winnipeg, Hamilton and Toronto,” said Marc Pinsonneault, a senior economist with National Bank Financial Group. “But even if these regions are excluded, August’s rise is still 0.5%, which seems rather high for markets globally in balance. Indeed, houses are unquestionably expensive, but it seems that households, considering the very low interest rates, still continue to find them affordable. It remains to be seen if the recent decline in consumer confidence will impact on the cruising rate of house prices.”