Canada: House prices rebound in May after eight consecutive months in the doldrums
House prices ticked up 0.5% on a monthly basis in May, according to the Teranet-National Bank Composite House Price Index, up from April’s flat reading. May’s print marked the first increase in nine months, and was driven by increases in 9 of the 11 markets surveyed. In annual terms, housing prices increased 0.7%, down from April’s 1.2%.
Prices in Hamilton, Ottawa and Halifax recorded the fastest month-on-month increases in May, while prices in Toronto—which accounts for over one-third of the 11-city composite index—also picked up notably. In contrast, prices in Vancouver and Edmonton fell in May.
Existing home sales are starting to show signs of stabilization, with May marking the fourth monthly increase in sales this year, driven by robust growth in key markets such as Vancouver, Toronto and Victoria. Moreover, the recent economic soft patch experienced in the previous two quarters looks to have been temporary and domestic demand should gain momentum in the coming quarters, which, coupled with government policies aimed at supporting first-time home buyers, could add some impetus to house prices. That said, price rises will still likely be somewhat muted by recent historical standards.