Canada: Housing prices continue to increase in December
January 20, 2020
House prices increased 0.2% on a month-on-month non-seasonally-adjusted basis in December, according to the Teranet-National Bank Composite House Price Index, matching November’s rise. In December, prices in 8 of the 11 markets surveyed rose over the month prior. Year-on-year, house prices were up 2.0%, which was higher than November’s 1.4% uptick, but still subdued compared to historical standards.
In month-on-month terms, prices in Halifax, Hamilton and Montreal registered stronger increases in December, while prices in Toronto—which accounts for over one-third of the 11-city composite index—also picked up notably. In contrast, prices in Calgary and Edmonton both decreased in December, contrasting small increases in November.
Looking ahead, precipitous household debt levels and affordability issues—in key housing markets—will likely continue to keep house prices subdued by historical standards. However, favorable mortgage rates and concerns over lackluster supply should continue to keep housing prices rising modestly.
Author: Steven Burke, Economist