Canada: House prices tick up in June as market appears to stabilize
House prices rose 0.9% on a monthly basis in June as the Teranet-National Bank National Composite House Price Index ticked higher, roughly in line with May’s 1.0% month-on-month increase. June’s rise appeared to confirm the nascent stabilization of the housing market, which experienced volatility over much of the past year as eager homebuyers were increasingly put off by higher borrowing costs and new mortgage-lending rules.
In June, 10 of the 11 cities included in the composite index posted gains from a month earlier. In Toronto, which accounts for more than a third of the 11-city composite index, prices climbed on tight conditions in the condo resale market—and pointed to a steadying in Canada’s largest property market. Vancouver and Montreal, meanwhile, also posted moderate gains in June.
In annual terms, the rise in house prices moderated in June, slowing to 2.9% from 4.5% a month earlier and representing the twelfth consecutive monthly deceleration since last June’s record-breaking gains. Meanwhile, a separate dataset showed weaker house sales in June as turnover hit a five-year low. All told, housing fundamentals still appear solid despite the ongoing sluggishness in residential investment—although June’s gains suggest that recent market-cooling interventions, especially in Ontario and British Columbia, have run their course.