Canada's Condominium Magazine

Teranet-National Bank Composite Price Index up 2.11% in July 2017

Prices are up on the Teranet-National Bank Composite Index by 2.11% month over month — or 27.96% year over year for July 2017. Although these numbers are somewhat different from TREB’s July price statistics —which showed 4.6% for monthly and 18% for year-over-year — they reflect a “smoothing” calculation, where the index is the average of the last three months. This is considered more reliable as an indicator, for example, by mortgage lenders. [To see our report on the July TREB numbers>>]

 

Taranet-National Bank Composite House INdex percentage change in price July over June 2017.

 

Composition of sales impacts index

The changes in preferences in Toronto towards condominiums and away from high-end homes and detached homes will increasingly impact the index.

“You also have lower sales of high-end homes and more sales of condos which are less expensive. The average price of transactions will be amplified by the change in the composition of sales,” said Marc Pinsonneault, an economist with National Bank.

Sales and pricing trends indicate the growing popularity of condominium apartments. Affordability is the primary factor driving this preference, influenced strongly by the desire to locate in the GTA, and particularly urban Toronto.

 

 

Toronto led the index

Toronto led the index gains, at 2.11% month-over-month, as compared to the index total composite of 1.96%. In year-over-year gains, Toronto showed 27.96% versus the overall index at 14.17%. Halifax was the only market indicating a drop in index of -1.05%

In the report from Teranet, they indicated: “While this looks strong given the current context in the GTA, note that a weakening is occurring in the unsmoothed index for “dwellings other than condos” which is down 1.6%.”

 

Taranet-National Bank Composite House Price Index comparison by city.

 

Month-over-month, the index showed mostly increases on the smoothed index (3-month average):

  • Calgary 0.42
  • Edmonton 0.58
  • Vancouver 2.8
  • Victoria 2.8
  • Winnipeg 0.73
  • Halifax (-1.05)
  • Hamilton 2.11
  • Ottawa-Gatineau 1.98
  • Toronto 2.11
  • Montreal 1.63
  • Quebec City 0.37
  • Overall Composite 1.96

Overall composite trending 12 months % change

Teranet-National Bank Composite House Price Index trending showing increases over the years.

 

Yearly trending on the Index for 6 cities

Comparison of six cities shows similar trending, but the clear pricing strength of Toronto and Vancouver. Vancouver, however, went through its “transitory shock” last year, while Toronto is in the midst of its reaction to new Fair Housing rules from Ontario. Purple is Vancouver, Dark Green is Toronto (top 2 lines on 2017.) Also compared are Ottawa-Gatineau, Montreal, Winnipeg and Edmonton

 

How the index is calculated

The current month’s contributing values represent closed & registered sales with the provincial land registry in the current reporting month.  The indices of the 11 metropolitan markets comprising the Teranet–National Bank Composite House Price Index™ illustrate house price trends by utilizing a rolling average of the last three months raw indices to produce that month’s official index level.  This procedure allows for the evening-out of month-to-month fluctuations.  More granular monthly data is available upon request, subject to subscription fees. To view our full methodology, please visit www.housepriceindex.ca 

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