Canada's Housing Bubble

Mar 31, 2010 Steve Ladurantaye theglobeandmail.com

Teranet–National Bank index finds rising prices in major markets have slowed for the first time in months

January saw the smallest house price increase since prices began recovering last year, according to the to the Teranet–National Bank National composite house index.

The index – which tracks six markets and adjusts the results for population and the number of times homes have been sold – found that while prices rose in every market except Calgary, the gains were tempered.

None of the six major markets surveyed saw prices rise by more than 1 per cent. The rise was 0.9 per cent in Vancouver, 0.7 per cent in Toronto, 0.6 per cent in Halifax, 0.4 per cent in Montreal and 0.3 per cent in Ottawa. In Calgary, prices declined 0.5 per cent.

Prices are now down 9.7 per cent from the previous peak in Calgary and 0.2 per cent in Vancouver. The other four markets passed their pre-recession peaks between May and October last year. Prices have gained 7.5 per cent in all of the markets year-over-year.

“The recent development comforts our view that fast price increases are becoming a regional phenomenon rather than a national one,” said National Bank economist Marc Pinsonneault. “This might even be truer over the next few months, as conditions on the Vancouver home resale market, where prices have risen briskly over the eight months ending last January, have since then shifted from a favourable-to-sellers market to a balanced market.”