Canada’s housing market was gearing up for a strong spring sales season as many markets ignited and buyers anticipated a change to the mortgage stress test.
Sellers were also optimistic, with prices on a national basis showing some very positive activity.
But COVID-19 brings a chill to the market that will inevitably have an impact on sales and prices.
The just-released Teranet–National Bank National Composite House Price Index shows that February’s national home price increase was 0.4% month-over-month, that’s double the average seen in the last 10 Februarys.
For the hottest markets, there were solid gains - Montreal 1.1%, Vancouver 0.8%, Halifax 0.8%, Toronto 0.4%, Victoria 0.2%, Winnipeg 0.1% and Ottawa-Gatineau 0.1% - while Hamilton (−0.3%), Quebec City (−0.4%), Calgary (−0.9%) and Edmonton (−1.3 %) posted declines.
For Vancouver, a city that was hard hit by the mortgage stress test and other market cooling measures, last month brought a fifth month without a decline, following 15 months of prices heading south.
The Prairies continue weaker the national picture.
Nationally, the index was up 2.9% led by Ottawa-Gatineau (8.7%), Hamilton (8.0%), Montreal (7.5%), Halifax (7.0%) and Toronto (5.1%).
COVID-19 impact ahead
Report author Marc Pinsonneault, senior economist at National Bank, is expecting declining conditions.
“The unprecedented sanitary measures imposed by the authorities to tackle the pandemic will severely impact business activity and jobs over the coming months. In that situation, the home resale market should be heavily curtailed for the coming months,” he wrote.
The index of 11 metros was benchmarked at 100 in June 2005 and tracks price changes on a percentage basis. February’s reading of 229.41 means prices are 129.41% higher than in June 2005.