The Stabilization of Home Prices Confirmed In May

In May the Teranet–National Bank National Composite House Price Index^TM  was up 1.0% from the previous month. This confirms the index stabilization following the downward trend that prevailed over the second half of 2017. The last monthly gain is one tick less than the May average of 1.1% over the 20 years of index history. The monthly advance was led by the metropolitan markets of Victoria (1.8%), Ottawa-Gatineau (1.7%), Toronto (1.3%), Winnipeg (1.3%) and Vancouver (1.0%). The rise of the Toronto index matched its historical average for May. The rise of the Ottawa-Gatineau index was not enough to make up its cumulative decline over the previous four months. There were smaller monthly advances in the indexes for Edmonton (0.7%), Quebec City (0.6%), Hamilton (0.4%), Calgary (0.4%) and Montreal (0.3%). The index for Halifax was flat.

In Toronto the condo resale market remains tight.[1] In May the condo subindex was up 11.1% annualized from the beginning of the year compared to only 0.8% annualized for all other housing types. The recent advance of the Vancouver index is also due primarily to its condo segment, whose subindex in May was up 17.5% annualized from last September compared to 4.9% for other housing types. Of the 11 markets in the composite index, Vancouver, Victoria and Montreal were the only ones whose indexes rose to a new high in May. In the Montreal market, existing-home sales in the first five months of the year were the best in eight years for those months. In May the countrywide composite index was 0.6% below its peak of last August. The metropolitan area furthest from its previous peak was Toronto, down 5.9% from its reading of last July.