Teranet-National Bank House Price Index sees another record monthly decline in September

  10/20/2022 |   SHARE
Posted in Canadian Housing Market by Sheru Asnani | Back to Main Blog Page

In September, the seasonally adjusted composite index fell by 2.0%, matching the previous month’s record decline and representing a fifth consecutive monthly contraction. Since its peak in May, the composite index (not seasonally adjusted) has already declined by 7.0%, whereas during the 2008 financial crisis, prices fell by only 6.2% over the same period and by 9.2% in total over eight months. In a context where monetary policy will continue to be tightened in the coming months, house prices should continue their contraction and exceed that experienced during the financial crisis of 2008. Indeed, we anticipate a record cumulative decline of about 15% nationally by the end of 2023, assuming a policy rate that tops out around 4.0% and a Bank of Canada that throws some weight behind lowering rates in the second half of 2023. Although corrections are being observed in the vast majority of markets covered by the index, the CMAs that have experienced the most significant price growth over the past two years are also those that have experienced the most significant declines to date. As a result, the price correction is expected to be more significant in Ontario, British Columbia and the Maritimes, while it is expected to be less significant in the Prairies, which are favoured by a buoyant economic environment.

MONTH-OVER-MONTH

Before seasonal adjustment, the Teranet–National Bank National Composite House Price Index™ fell 3.1% from August to September, the largest monthly decline on record since the index began in 1999 and shattering the previous month’s record decline of 2.4%.

After seasonal adjustment, the Teranet–National Bank National Composite House Price Index™ fell 2.0% from August to September, a monthly drop that equalled the previous month’s record and the fifth consecutive decline. In September, eight of the 11 CMAs included in the index experienced contractions, while prices were up in Calgary (+1.2%), Halifax (+1.1%) and Edmonton (+0.2%). The largest price declines were in Victoria (-5.9%), Vancouver (-3.5%) and Hamilton (-2.1%). For the remaining CMAs not included in the composite index, a decrease was observed in 18 of the 20 CMAs. The largest monthly decreases were observed in Peterborough (-11.8%), Windsor (-5.4%), Belleville (-5.1%) and London (-5.0%). Conversely, Trois-Rivières (+5.5%) and Brantford (+2.0%) were up.

YEAR-OVER-YEAR

The Teranet–National Bank National Composite House Price Index™, covering eleven CMAs around the country, recorded an annual gain of 6.0% in September, the fifth consecutive month of lower growth than the previous month. Increases were seen in all eleven cities in the composite index in September. Halifax led the way with a 16.4% year-over-year price increase, followed by Calgary with a 14.7% gain and Montreal with a 10.8% increase. As for the other 20 CMAs not included in the composite index, positive annual gains were observed in 19 of them, with Peterborough being the exception (-6.6%). In the remaining cities, increases ranged from 2.0% in London to 19.6% in Trois-Rivières.

Full Report >> October 2022

Source: Teranet

Canada Real Estate, Canadian Home Sales, Canadian Housing Market, Canadian Real Estate Market Outlook