Calgary once again led the nation in annual price growth, posting a 6.5% hike in December according to the Teranet–National Bank House Price Index™. Between November and December, prices dipped -0.3% bringing the index to 171.67. Calgary’s index level peaked in September 2007 at 174.00.
Vancouver, its real estate market once described as being in “full correction mode” by one analyst, had prices push up 0.6% m/m and 5.5% y/y to reach a new all-time peak in December.
Toronto had the third highest y/y increase at 4.9%.
Only one city had prices lower than the year before: Victoria, down -4%. Prices were down in that city from a year earlier for the 10th consecutive month.
National Bank Commentary: The Composite Index ends 2013 with a 3.8% gain, an acceleration compared to the 3.1% increase in 2012. But this pick-up comes from only three regions (namely, Calgary, Vancouver and Toronto) where price increases in 2013 exceeded the national average.
For the eight other regions covered, the overall price increase was just 1.2% in 2013. Price weakness was especially visible in Victoria, Ottawa-Gatineau, Montreal, Quebec City and Halifax. An improvement in 2014 is not in sight in these five areas, as market conditions were still favourable to buyers towards the end of 2013.
Furthermore, affordability has decreased in Canada due to higher mortgage rates. For these reasons, we believe that overall in Canada, house price increase in 2014 will barely cover CPI inflation (about 1.5%).
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. This is known as the repeat sales method