Over one per cent each month. That’s how much Calgary home prices have been rising since February, according to the Teranet-National Bank House Price Index released today.
Calgary repeat home sale prices rose 1.1% in May, the 4th month in a row that monthly gains exceeded one per cent. Year-over-year prices were up 8.7% in Calgary, once again the largest gain in Canada.
The Teranet – National Bank House Price Index™ is estimated by tracking the observed or registered home prices over time. Properties with at least two sales are required in the calculations. Such a “sales pair” measures the increase or decrease of the property value in the period between the sales.
Bank Commentary on Teranet Data
National Bank: Although May’s advance in the Composite index looks robust, it is in fact the fifth weakest for a month of May in the 16 years covered by the index.
Indeed, 12-month home price inflation decreased from 4.9% to 4.6%. Furthermore, market conditions are all but homogeneous from a regional standpoint. On a y/y basis, there is price-deflation in each of the regions covered east of Toronto, a situation that is consistent with the excess supply observed on the house resale market in these regions. This excess supply will persist for a while and should continue to weigh on prices over the next few months.
That being said, the market is generally balanced elsewhere, and is even tight in Calgary. Overall, the Composite index should continue to grow over the next few months, with weakness east of Toronto being dwarfed by healthy market conditions elsewhere. (Read full commentary )
TD Economics: With the spring housing market in full swing and lower mortgage rates on offer, a healthy rise in prices was in the cards for May. That said, the fact that there was slight deceleration in price growth on a year-over-year basis may be an indication that the market is becoming more balanced. Looking ahead, we expect to see to a moderation in the growth of home prices in the second half of 2014 through 2015.
The supply of homes available for sale should increase as potential sellers react to a higher price environment and put their homes on the market. What’s more, there are a record number of new homes under construction, and the completion of these units will also boost supply. We are already seeing these dynamics in the cities of Ottawa, Montreal and Quebec City. These cities currently have a high level of inventories following a period of overbuilding that is weighing on prices. Conversely, both Calgary and Toronto currently have undersupplied markets that have supported higher price gains in recent months. (Read full commentary )