House Price Index (HPI): May 2011

Calgary home prices in May were up +0.6% from the previous month, according to the Teranet-National Bank National Composite House Price Index. Year-over-year, Calgary prices were down -4.1%  for an 8th consecutive month of 12-month deflation.

Canadian home prices in May were up 1.3% from the previous month. This rise took the index to a new high of 142.27 (June 2005 = 100). It was the second consecutive monthly increase exceeding 1% and the largest since July 2010. It was also the sixth consecutive monthly rise, coming after three straight monthly declines. As in April, prices were up in all six of the metropolitan markets surveyed.  The 12-month gain of the composite index in May was 4.4%, the same as in April.

Teranet notes that given the time lags between home sales and their entry in public land registries, it is possible that the large April and May rises of the composite index were due to front-loading of sales to beat the March effective date of an announced shortening of the maximum amortization period for insured mortgages. This front-loading was very perceptible in Vancouver, incidentally the market with the fastest price index growth from March to May.

In June, according to seasonally adjusted data from the Canadian Real Estate Association, market conditions were balanced in the country as a whole while appearing tight in Toronto.

Other Highlights:

  •  For Vancouver it was the eighth consecutive monthly increase.
  • The Toronto index topped its recent peak of July 2010.
  • The index for Ottawa was only fractionally away from its August 2010 peak.

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