The Teranet-National Bank HPI posted a bigger fall in March this year than during the 2008-2009 crisis
Canadian home prices declined in March and set a new record for a key index.
The Teranet-National Bank Home Price Index was down 6.9% year-over-year, a larger drop than the previous record during the 2008-2009 financial crisis.
The index is based on percentage movement based on a 2005 benchmark of 100 and considers eleven CMAs across Canada. The month-over-month seasonally-adjusted figure was a 0.8% decrease and was the ninth consecutive monthly decline.
Looking at regional and city data, 7 of the 11 markets surveyed recorded a decrease led by Victoria (-4.5%), Winnipeg (-2.4%), Toronto (-1.9%), Edmonton (-0.9%), Hamilton (-0.1%), Quebec City (-0.1%) and Ottawa-Gatineau (-0.1%).
However, prices increased during the month in Halifax (+2.3%), Montreal (+0.5%), Vancouver (+0.3%) and Calgary (+0.1%).
Annually, the CMAs that have experienced the largest price growth over the past two years are also those that have recorded the sharpest declines to date.
A recent RE/MAX Canada report suggests that the luxury housing market may be more optimistic.
Better times ahead?
While the notes accompanying the index point to signs of stabilization in the resales housing market and the non-seasonally adjusted index posting its first monthly increase in ten months (0.5%), the outlook remains negative.
“With the Bank of Canada expected to keep its policy rate in restrictive territory for much of 2023 and mortgage rates remaining high, we believe that the impact on property prices should continue to be felt in the coming months,” the report says. “All in all, we anticipate that the price correction that currently stands at 8.8% could continue through the end of 2023 (-5% additional), but this assumes that policy rate hikes are over, and declines begin at the end of the year.
