Canada: House prices continue to increase in June
July 18, 2019
House prices ticked up 0.8% on a monthly basis in June, according to the Teranet-National Bank Composite House Price Index, up from May’s 0.5% increase. 9 of the 11 markets surveyed rose over the month prior. As a result, home prices in Q2 rose in quarterly terms for the first time since the third quarter last year. However, the result was driven mainly by a seasonal boost—house prices fell month-on-month in seasonally adjusted terms in June—and was below the 21-year average increase for the month of June. Year-on-year, house prices were up 0.5%, down from May’s 0.7% uptick.
Prices in Ottawa, Victoria and Hamilton recorded the fastest month-on-month increases in June, while prices in Toronto—which accounts for over one-third of the 11-city composite index—also picked up significantly. In contrast, prices in Vancouver and Calgary dipped.
Going forward, house price rises will likely be modest by historical standards, while elevated household debt and affordability issues in key markets pose downside risks.
Author: Steven Burke, Economist