A useful tool for analyzing the health of the Canadian real estate market is the Teranet / National Bank House Price Index which released its May 2009 report today. According to the report housing prices across Canada decreased by 5.8% year over year from March 2008 to March 2009 which extends a 4 month streak of consecutive year over year declines. Since the peak of housing prices in August 2008 prices have also fallen about 8.5%.
The report also breaks out housing price trends for the 6 major metropolitan areas of Toronto, Vancouver, Montreal, Ottawa, Calgary and Halifax.
| Metropolitan area | Index level Mar-2009 |
% change m/m | % change y/y | From peak | Peak Date |
| Calgary | 152.97 | -0.8 % | -8.4 % | -12.7% | Aug-2007 |
| Halifax | 118.17 | 1.0 % | -0.8 % | -3.0% | Nov-2008 |
| Montreal | 120.60 | 0.0 % | 2.9 % | -1.6% | Sep-2008 |
| Ottawa | 113.14 | -0.5 % | 1.0 % | -4.3% | Oct-2008 |
| Toronto | 104.68 | -1.9 % | -6.9 % | -10.8% | Aug-2008 |
| Vancouver | 133.02 | -1.7 % | -9.6 % | -11.7% | Jun-2008 |
| National Composite | 119.62 | -1.3 % | -5.8 % | -8.5% | Aug-2008 |
As you can see from the table above the largest declines in price from the peak have been experienced in Calgary, Vancouver and Toronto.
A lot of the economic turmoil that has occurred in the United States over the last year has been related to the rapid correction in their housing market. I saw a stat yesterday that US housing prices have dropped over 33% since the peak a couple of years ago and are continuing to decline according to the latest S&P/Case-Shiller Home Price Index report from May.
Some people are of the opinion that Canadian housing prices have not declined as much as US housing prices as a result of stricter mortgage lending regulations imposed by the Canadian Mortgage and Housing Corporation. However one has to question if the Canadian housing market still has a long way to go before it hits the bottom.
I will continue to post the lastest trends from the Teranet / National Bank House Price monthly report as they are released to keep you informed of the trends.
Tags: Housing Prices, Real Estate
