Canada: House prices wither for sixth consecutive month in March
April 12, 2019
House prices fell 0.3% on a seasonally-adjusted monthly basis in March, according to the Teranet-National Bank National Composite House Price Index (February: -0.4%). March’s print marked the sixth consecutive monthly decline in the index, driven by drops in 7 of the 11 markets surveyed. In annual terms, housing prices increased 1.5%, down from February’s 1.9% climb.
Prices in Victoria and Ottawa recorded the sharpest month-on-month drops in March, while prices in Toronto—which accounts for over a third of the 11-city composite index—also edged lower. In contrast, prices in Montreal and Quebec City rose.
In month-on-month terms, housing prices have been locked in a downward trend for the past two quarters but could recover somewhat in H2 this year thanks to the government’s fiscal 2019 budget. The budget aims to support middle-class workers and first-time home buyers who have suffered in the past few years due to affordability issues resulting from rising interest rates and tighter mortgage guidelines. The Bank of Canada’s monetary stance will be another key factor to watch.
Author: Steven Burke, Economist