Pace of housing price increases continues to slow

Housing prices rose for the 15th straight month in July, but by the smallest margin in four months, according to a national index released Wednesday.

And for the first time in four months, prices failed to rise above the previous month’s in all of the six metropolitan areas measured in the Teranet-National Bank house price index.

The price of resale homes in July was up 12.4 per cent from the previous year, according to the index, which showed the pace of price increases declining even though the year-over-year increases in Toronto and Vancouver were more than 14 per cent, and in Ottawa the increase 10.9 per cent.

The month-over-month change was also the smallest in four months, with the composite index as a whole in July rising just 0.5 per cent over June.

“For the first time in four months, prices did not rise from the month before in all six markets,” said Marc Pinsonneault, senior economist at National Bank Financial Group. “The Vancouver index was down 0.3 per cent from June.” The biggest monthly increases were to be found in Toronto, up 1.2 per cent, and Ottawa, where prices advanced by 1.5 per cent, which Pinsonneault attributes at least in part to the manoeuvring to avoid the harmonized sales tax, introduced in Ontario on July 1.

“According to the Canadian Real Estate Association, from March to August of this year, more existing homes came on the market than were sold. Therefore, the resale market has been slackening across Canada,” said Pinsonneault.

Housing prices in July (% change m/m % change y/y):

Calgary 0.4 7.7

Halifax 0.2 65

Montreal 0.4 8.5

Ottawa 1.5 10.9

Toronto 1.2 14.9

Vancouver -0.3 14.1

National composite 0.5 12.4

Source: Teranet-National Bank