July marked the first time in 12 months that Calgary real estate prices posted a gain according to Teranet-National Bank’s HPI.
Calgary prices were up 1% from June, but still down 11.1% from July 2008 – the largest YoY decrease among cities tracked by the index.
Excerpt from the report:
Canadian home prices in July were down 5.1% from a year earlier, according to the Teranet-National Bank National Composite House Price Index™. Though it was the eighth consecutive 12-month decline, it was also the first time in 13 months that prices in every region covered by the index were up from the month before. For the composite index it was a third consecutive monthly rise. The trend reversal is consistent with improving market conditions for the country as a whole in recent months – more homes have been selling and fewer have been coming on the market.
The recent monthly gains indicate “the market correction is behind us,” said National Bank senioreconomist Marc Pinsonneallt.
However, University of Calgary economist Frank Atkins isn’t so sure the index’s results for July mean a rebound is at hand. It would take several consecutive months of improvements before he’d draw that conclusion.
“I would hope we’ve turned the corner, because this is consistent with all kinds of other little bits of evidence all over the place, not just housing, but there’s not enough of it gelling together for a long enough period of time that I would say we’ve turned the corner on anything,” Atkins said. (Source)
In comparison, Calgary SFH MLS® average prices were down 2% between June and July, and down 4% YoY. The median price was also down 2% from June, and down 5% from the previous year.
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On Forecasting
It’s not a science, whether for real estate prices or the economy. Here are a few forecasts from as recent as Monday from economists regarding Canada’s GDP:
Michael Gregory, senior economist for BMO Capital Market forecast 0.5% growth for July saying, ”two positive readings (would) follow 10 consecutive declines and provide more evidence that Canada’s economy emerged from recession this summer.” (Source)
Derek Holt, vice-president of economics at Scotia Capital, forecast the Canadian economy grew ”north of one% in July (Source) (The last time the economy grew by at least 1% on a monthly basis was in March of 2004)
TD Securities forecast 0.5% gain saying, “We certainly do not dispute that Canadian GDP appears on track for a second consecutive monthly gain.” (Source) ”The tone of these data is undeniably positive and though there may be some transitory element to the strength in the motor vehicles component, it will still undoubtedly add to July GDP,” said Charmaine Buskas, senior economics strategist at TD Securities.
Douglas Porter, BMO Captial Markets (thought) those numbers (will) look relatively solid and will signal “a little bit more of an official end to the recession than that the meagre 0.1 per cent rise in June.” (Source)
Most economists had expected the economy to grow by between 0.4 and 0.5 per cent in July.
Well, Statistics Canada released GDP numbers this morning showing 0% growth.
“Okay, this is a shocker,” said Douglas Porter, deputy chief economist at BMO Capital Markets. “We’re not talking about a shot across the bow of the optimists, this is more like a torpedo through the hull. It’s not just the consensus that will be surprised by this result — the Bank of Canada has been loudly proclaiming lately that growth would likely surprise to the high side of their July forecast in the second half of the year . . . .” Porter said.
