Canada Just Saw its Largest 12-Month HPI Gain on Record
With housing prices escalating across the country over the past year, June capped off a record-setting 12-month price gain, surpassing the previous record set in 2017.
Last month, the Teranet-National Bank National Composite House Price Index (HPI), an independent representation of the rate of change of Canadian single-family home prices, was up 16% year-over-year.
The new record surpassed the 14.2% rise recorded in June 2017, which heralded the introduction of new government measures to restrain home prices during the peak of Canada’s housing market boom.
At that time, price gains were concentrated in the markets of Vancouver and the Golden Horseshoe region, including in Toronto and Hamilton. However, the new record is based on countrywide increases across the more than 30 regions covered by the index.
According to the latest HPI, prices were up 10% or more in an unprecedented 90% of the 32 urban markets for which an index exists and 30% or more in an equally unprecedented 42% of these markets.
The June monthly gain of 2.7% in the national composite index was its 20th consecutive monthly rise and the second-largest since the beginning of the index in 1999. However, it was 2021’s first decrease in housing price gains in comparison to the month before, as May recorded a 2.8% rise.
This cooling coincides with a slowing of growth in existing home sales — declining in June for a third straight month.
Teranet-National Bank says the moderation of the pace of sales could mean a slowing of price rises in the coming months.
“However, since the market remains vigorous by historical standards, we do not anticipate a decline of prices in the near term,” the company said.
The 12-month rise was led by five markets — Halifax (30.8%), Hamilton (28.0%), Ottawa-Gatineau (25.8%), Montreal (19.4%), and Victoria (18.5%). Lagging behind the nationwide average were Toronto (15.9 %), Vancouver (14.7%), Quebec City (10.8%), Winnipeg (9.9%), Calgary (6.0%), and Edmonton (5.5%).
The Teranet–National Bank House Price Index is based on the repeat-sales method, is calculated based on the change in price between the two most recent sales of properties that have been sold at least twice.