Canada: Housing prices continue to increase in January
House prices increased 0.1% on a month-on-month non-seasonally-adjusted basis in January, according to the Teranet-National Bank Composite House Price Index, slightly weaker than December’s 0.2% uptick. Year-on-year, house prices were up 2.1%, which was higher than December’s 2.0% rise, but still subdued compared to historical standards.
In January, prices in 6 of the 11 markets surveyed rose over the month prior. Prices in Hamilton, Montreal and Vancouver registered the strongest increases in January, while prices in Toronto—which accounts for over one-third of the 11-city composite index—also picked up slightly. In contrast, prices in Quebec City and Victoria both decreased in January.
Looking ahead, elevated 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 tight supply should continue to keep housing prices rising modestly.