Calgary’s Annual House Price Growth Exceeds National Average

Calgary was dethroned by Vancouver as the city with the highest annual price gain last month according to the Teranet–National Bank House Price Index™.

Year-over-year, Calgary repeat sale prices in January increased by an impressive 7.1%.   However, that was not good enough for top spot as Vancouver posted an even greater  7.5% y/y jump and reached a new HPI peak.  Between December and January, Calgary prices increased 0.4%

Aside from Vancouver, Toronto also reached a new all-time high last month.    On the other side of the spectrum, prices were down from a year earlier in Victoria (−5.7%), Halifax (−2.9%) and Ottawa-Gatineau (−0.6%).

January 2014 House Price Index

January 2014 House Price Index

Bank Commentary

National Bank:  While regional differences exist, Canada’s housing market generally continues to hold firm. Prices are well supported in the Greater Toronto Area and Western Canada (with the exception of Victoria). The improvement in affordability in the last couple of months seems to have propped-up interest in the housing market. But don’t expect January’s stronger-than-expected price gains to be repeated throughout the year. Downward price pressures could become more apparent in regions that are close to or in a buyers’ market e.g. Ottawa-Gatineau, Halifax, Montreal and Quebec city. Even cities that are in a “balanced” territory like Toronto can expect some downward price pressures in the condo segment where inventories, according to Realnet, are relatively high. (Source)

TD Bank: Today’s Teranet HPI release surprised on the upside with a larger gain in momentum than expected. Home price gains are still exceeding income growth by a considerable margin, especially in larger real estate markets like Toronto and Vancouver. A low supply of new listings is an important contributor to the upward pressure on prices.  However, as U.S. and Canadian economic growth accelerates and the Federal Reserve continues to taper its quantitative easing program, North American bond yields are likely to rise over time and this will be reflected in mortgage rates. As a consequence, the current stronger  than expected prices are likely to soften over the medium term. (Source)

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