With the release of CREA’s Canadian real estate report on Tuesday, National Bank Financial Markets has released its Teranet - National Bank House Price Index; which posits homebuyers are haggling for better home prices to balance out increased rates.
“Price behaviour seems to be at odds with the recent pickup in resale activity, which we estimate at close to 42,000 units in September,” the report said. “It looks that households are willing to buy, but they are now bargaining harder on prices to compensate for higher mortgage rates.”
And although housing prices increased year-over-year, the report warns that this should not be viewed as an indication that the market is strengthening.
“Twelve-month house price inflation accelerated in September due to a base effect (prices declined on a monthly basis in September 2012),” the report continued. “In no way does this indicate generalized market strength.”
It also points to the lack of growth in a number of Canadian markets – an aberration that has not occurred in over a decade.
“In fact, September’s performance was weaker than normal. Indeed, the average increase for a month of September is 0.2%,” the report said. “Furthermore, it is only the third time in 15 years that prices have failed to grow in eight of the eleven regions at this time of the year.”