Calgary home prices advanced 8.1% year-over-year in June, leading Canada for the fifth straight month according to the Teranet-National Bank House Price Index released today. Repeat sale prices increased 0.9% between May and June.
TD Economics: With the housing market having now shaken off the winter blues, price are continuing to rise at a solid pace. That said, the continued deceleration in price growth on a year-over-year basis may be an indication that the Canadian housing market is becoming more balanced.
We expect to see the cooling trend continue through the end of 2015. This view is premised on rising prices encouraging strong growth in new listings while the number of newly-competed housing units remain elevated, both of which will boost supply and weigh on prices. At the same time, interest rates are likely to grind higher in Canada, resulting in reduced affordability.
Oversupply of housing has already been evident in the markets of Halifax, Ottawa, and Quebec City. In contrast, the resale markets that saw the strongest year-over-year growth in June still look to be on the tight side. (Read full commentary )
National Bank: Although June’s advance in the Composite index looks robust, it is the second lowest gain in the last decade for a month of June. Indeed, at 4.4%, the 12-month change in the Composite index is the weakest since the beginning of the year.
Price trends continue to diverge on a regional basis, with weakness concentrated in regions located east of Toronto. This is consistent with a situation of excess supply on the resale markets in these regions, while markets are balanced elsewhere and even tight in Calgary and Hamilton.
The price decline from a year ago in Winnipeg (a first since September 1996) seems to be related to a recent surge in new listings relative to sales, a situation perhaps triggered by the fact that prices in that city have nearly doubled in the last nine years, the best performance among the regions covered by the Index. Looking ahead, the Composite index should continue to grow over the next few months, with weakness east of Toronto being dwarfed by generally healthy market conditions elsewhere. (Read full commentary )