The downward trend in Canadian home prices continued in March—and now extends beyond Western Canada.
Last month the Teranet–National Bank national home price index slipped for the sixth month in a row—a first in six years, National Bank said in a report. The index dropped 0.3% in March, with the biggest drops occurring in Ottawa-Gatineau (–1.5%), Victoria (–1.1%), and Vancouver and Calgary (both –0.5%).
While home price weakness has recently been most evident in western metropolitan areas such as Vancouver and Calgary, it now extends to nine of 11 regions that make up the index. The exceptions are Montreal and Halifax, up 0.1% and 0.8% month over month.
Falling prices are indicative of housing markets adjusting to the recent rise in interest rates and the implementation this year of stress tests for insured mortgages. But the weakness doesn’t mean collapse, National Bank said in the report.
For example, in Toronto, apartment prices are up for 17 consecutive months. In Vancouver, Canada’s most expensive housing market, strong employment growth in the first quarter (annualized) should limit further home price declines, the report says.
Further, on an annual basis, the home price index rose 1.5% from March 2018 to March 2019.
For details by city, read the Teranet–National Bank home price index.