“In February the east-west dichotomy became more pronounced than ever,” writes National Bank’s senior economist. Home prices were up from the month before in all five markets of Western Canada according to the Teranet-National Bank House Price Index ™ released today with Calgary and Vancouver reaching new record highs.
In Calgary, prices were up 9.6% from the previous year – nearly double the national composite and once again reclaiming top spot for best annual growth of all the cities tracked. Between January and February, Calgary repeat sales prices were up 1.1%.
Calgary’s index is now at a new peak level. The last peak was in September 2007 when the index was at 174.00.
TD Economics: Another month, another surprise on the upside when it comes to Canadian home prices. Price increases are still outpacing income gains by a wide margin in many markets, a situation we deem unsustainable in the longer run. A low supply of new listings remains a key contributor to upward pressures on real estate prices. Furthermore, with U.S. and Canadian economic growth set to pick up the pace throughout 2014, we expect North American bond yields to rise over time and impact mortgage rates. This should contribute to reduced housing affordability (Read full commentary)
National Bank: The fact that the national housing market is not homogeneous is highlighted by the fact that the National Composite Index is at a record level while there is price deflation in 4 out of the 11 regions covered. The latter situation has not been seen since the aftermaths of the last recession, 4 ½ years ago. Indeed, the country can be separated into three regions where 12-month price growths have behaved quite differently: 1) West and Ontario (except Victoria and Ottawa-Gatineau) where resale markets are either hot or balanced, 2) other regions located east of the former where markets are rather favourable to buyers and 3) Victoria where price deflation has prevailed for the last few years. Except for Victoria where conditions have improved lately, we do not expect a turnaround in market conditions in the next few months. (Read full commentary)
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