Canada’s largest land registry and a big six bank are seeing a slight recovery, but things are beginning to trend lower. The Teranet–National Bank House Price Index (TNB HPI) shows prices increased in July. The increase however, was the smallest for the month in 15 years, and is actually a decline before seasonal adjustments.
Canadian Real Estate Prices Make Smallest July Increase In 15 Years
Canadian real estate prices made one of the smallest moves in over a decade, actually sliding when unadjusted. The C11, an index of the largest 11 markets, increased just 0.34% in July, making prices 5.49% higher than the same month last year. On an unadjusted basis, prices actually fell 0.3% from the month before.
Teranet-National Bank HPI C11 (Annual Change)
The 12 month percent change of real estate prices in Canada’s 11 largest cities, according to the TNB HPI.
Source: National Bank of Canada, Teranet, Better Dwelling.
The deceleration of growth across the C11 is the first in almost a year. The 0.34% seasonally adjusted monthly increase for July is the smallest in 15 years. Unadjusted, this is the second consecutive monthly decline. National Bank economists also noted that sale volumes are down significantly. However, on a seasonally adjusted basis, they made a monthly increase, implying a little bit of a recovery.
Toronto Real Estate Prices Are Up Over 8% From Last Year
Toronto saw its third month of consecutive price growth deceleration, but still climbed to a new high. Prices in the region were up 0.30% in July, and are now up 8.06% from last year. The monthly increase is in line with the national movement, and prices are at a new all-time high. The rate of growth however has decelerated for another consecutive month, making it the second deceleration print.
Toronto Real Estate Price Change
The 12 month percent change of real estate prices in Toronto, according to the TNB HPI.
Source: National Bank of Canada, Teranet, Better Dwelling.
Vancouver Real Estate Is One of The Few Markets To See A Monthly Drop
Vancouver real estate was one of the few markets to see a monthly decline, although it was barely a drop. Prices in the region fell 0.03% in July, and are now up just 2.17% compared to the same month last year. Prices are still down 4.20% from the peak reached in July 2018. The monthly movement was flat, but the 12-month change was one of the few markets to see mild acceleration.
Vancouver Real Estate Price Change
The 12 month percent change of real estate prices in Vancouver, according to the TNB HPI.
Source: National Bank of Canada, Teranet, Better Dwelling.
Montreal Real Estate Prices Rise, But Annual Growth Decelerates
Montreal real estate continues to rise faster than the national average. Prices increased 0.30% in July, and are now up 9.31% from the same month last year. Prices are now at a new record high. This is a slight deceleration for growth, falling out of the double digits again.
Montreal Real Estate Price Change
The 12 month percent change of real estate prices in Montreal, according to the TNB HPI.
Source: National Bank of Canada, Teranet, Better Dwelling.
Calgary Real Estate Prices Fall Further From 2014 Peak
Calgary real estate prices are still nowhere near the peak hit over half a decade ago. Prices increased 0.10% in July, and are now down 1.88% compared to the same month last year. Calgary real estate prices are now down 8.19% from the peak reached in October 2014, and since the climb was smaller than seasonal – it’s getting further from that peak.
Calgary Real Estate Price Change
The 12 month percent change of real estate prices in Calgary, according to the TNB HPI.
Source: National Bank of Canada, Teranet, Better Dwelling.
Canadian real estate prices increased, but also made the smallest rise in 15 years. Once unadjusted, that increase was actually a decline. There’s a few signs of recovery, but in terms of price action, it’s a little bit scattered. Markets like Toronto and Montreal are seeing prices climb even further, albeit annual growth is decelerating. However, cities like Calgary and Vancouver are seeing prices fall even further from the peak reached a few years ago.
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That means Toronto also dropped when not seasonally adjusted, is that correct?
Technically, yes. Assuming there isn’t a localized seasonal adjustment.
Any thoughts on extending the deferrals? It’s really hurting bank stocks, considering a lot of people aren’t paying their mortgage but they have the money.
They already flat out told the banks they won’t be extending deferrals. Can’t drag the economy for ever, especially when they’re giving people enough money to pay their rent.
Agreed I sense there is a free- rider constituency out there that want to extend defferals and eviction bans(both commerical and residential) for as long as possible and knock-off effect be damed.
Wouldn’t be surprised if there are lobby groups from realtors and developers associated with it as they have the most to lose, plus they’re more funded than some poverty groups.
Real estate here in the GTA is going to tank once the deferrals and CERB end (this month) and a large portion of people still can’t pay their mortgages as they weren’t paid by their landlords or didn’t have income cause no AIRBNB. Another factor is jobs that we were told would simply bounce back in a ‘V’ shaped recovery wont be on account the border is closed and people aren’t travelling meaning no AIRBNB or dollars coming in from tourists. No one working in the towers in downtown Toronto (as there is a limited space in the elevators and the rules right now are 2-3 passengers per trip up) mean shops dependent on the dollars those employees spent for their morning breakfast sandwiches or coffee as well as lunches and dinners wont be there (this includes misc. variety stores or shops in the PATH). This right now is the calm before the storm.
Your assuming everyone on the Cerb has a mortgage and everyone who has deffered their mortgage has done it out of desperation not premption.
I doubt the PATH stores will be closed forever and yes there are challenges to re-opening an economy but failure is NOT inevitable
The financial markets worldwide have looked beyond the V-shaped recovery,perhaps they’re foolish and by all means short them but as the old saying goes the markets can be irrational longer than you can be solvent
The financial markets are a forward discount mechanism however the caveat is the real economy has historically never caught up to the market. The market has overshot through stimulus. As far as RE it also has overshot the real economy with accommodative lending and low rates.
There will be a day of reckoning in the future but who knows when. The markets can remain irrational longer than you can remain solvent. Goes till it blows .
That’s hilarious that you believe RE in Canada is a free market.
Not saying it is free market.
Cheap money and banks that are backed up by the government (MBS) and placing risk to taxpayers can keep the RE bubble going. However, household debt and market distortions can’t be resolved by more debt. There will be a deleveraging in the future . Depends on government monetary/fiscal policies when and how this happens. Money printing or austerity.
I work in the financial district, PATH was great during the winter. But this pandemic have killed the PATH, before the lockdown there was already a wave of store closures. Now I dont believe any store can survive.
However, these stores are nothing we cant replace, they are just all clones.
My take is real estate prices will come down. As someone working in financial services banks can comfortably deal with prices 30-50% below current levels because the recent mortgages make up relatively small amount of all mortgages. However the longer we prop up this bubble the worst it will be for the banks. The government should let prices fall.
Have difficulty beiieving that banks can shrug off 30%-50% decline in real estate without significant effects to wider economy. T
Canada is slowly killing our young people via real estate bubble. Most honorific crime against Canadians in our history.
Young people did it to themselves by putting Trudeau in office. 40% spike in immigration and large increase in TFWs and refugees, all competing for homes and rentals. Combined with hands-off approach to money-laundering. Who do you think that impacts most? Young people in big cities. They got what they voted for.
This mess began long before Oct. 2015 when Trudeau was elected. This was gift from Harper & Flaherty which Trudeau & Co. didn’t address; both parties and leaders need to take responsibility for creating a generation of renters.
Most people who are benefitting from these crimes against young Canadians will make up lies and defend their own interests.
What have Canada become, this housing bubble have rotten our soul as a nation. Our government is now knowingly and delightfully grinding up young people (economically for now) via taxes and real estate bubble. Its sad these people are so blinded by greed.
We do not have lack of land, we do not have lack of resources, yet young people are forced to go heavily indebt to fuel this greed.
If you want a real eye opening look at the homes that sell and take a look at their price history. Most of them that I have seen in the price range of 1.5 – 3 million are listed then have the original listings cancelled and then relisted again. So they start out at say 3.9 million (for a 3 million dollar home) but then cancel and relist multiple times finally ending down at 3.2 million when they sell. Selling price is 3.05 million. The sale is then posted in the home sale database as selling at 96% of asking but the truth is as the original list price was significantly higher it’s only 82%. This is how the numbers are skewed. Another trick the Real Estate Board has done is eliminated certain segments of the real estate market when reporting average sale prices. They now qualify that the average price is for ‘traditional’ homes and not as before (homes). It’s really sad but I guess they have to continue doing what they have to do to take advantage of the gullible who continue to believe home prices have no where to go but up and have a fear of missing out (FOMO).