Resale home price gains in Calgary led the nation in October, posting a 6.7% y/y increase according to the Teranet–National Bank House Price Index™. Calgary’s index rose 0.9% between September and October and was one of only three markets with positive m/m change.
Only two cities had negative annual price growth. Prices were down from a year earlier for an eighth consecutive month in Victoria (−0.5%) and a third consecutive month in Halifax (−0.7%).
National Bank Economist, Marc Pinsonneault writes:
Annual home price inflation may have accelerated to 3.1% in October but we doubt that there is significant upside going forward.
Even if 12-month inflation will continue to benefit from a favourable base effect through February 2014 – recall that home prices declined in six consecutive months after the introduction of more stringent homeownership rules in July 2012 – the fact still remains that the 0.1% monthly increase recorded in October was weaker than normal.
What’s more, prices failed to grow on a monthly basis in at least eight regions. This is a development usually associated with price weakness. Resale activity has picked up in recent months, but it seems that households are bargaining harder on prices to compensate for higher mortgage rates.
Yes, the 0.1% monthly increase was “weaker than normal,” but how much was the average October gain going back 15 years? Only 0.2%. The 0.1% increase was actually the first positive October reading since 2009.
The Teranet–National Bank House Price Index™ is estimated by tracking observed or registered home prices over time using data collected from public land registries. All dwellings that have been sold at least twice are considered in the calculation of the index.
All indices have a base value of 100 in June 2005. For example, an index value of 130 means that home prices have increased 30% since June 2005