Canada: Housing market data for May is positive
According to the Teranet-National Bank House Price Index, house prices rose 1.6% month on month in May, following April’s 1.8% increase. Meanwhile, house prices decreased 7.6% annually in May, up from April’s 8.5% decrease. Moreover, home sales and property listings jumped in May from April.
Meanwhile, housing starts fell 23% in May from April. However, this was partly the result of a bumper May figure, and average housing starts in April–May are still higher than the Q1 average.
Taken together, the latest data suggests the property market is in recovery mode, supported by a robust jobs market and brisk population growth. That said, renewed rate hikes by the Bank of Canada could dampen the revival ahead.
On the housing starts data, TD Economics’ Rishi Sondhi said:
“Starts are volatile and not every data point will move in a straight line downwards. Even with today’s decline, starts are tracking 4% higher than their first quarter average thanks to an April pop. This, alongside what will likely be a super-sized gain in home sales should generate a positive second quarter growth print for residential investment, supporting the overall economy.”