Canadian real estate prices are stalling, according to an index from one of Canada’s Big Six. The Teranet–National Bank of Canada House Price Index (Teranet HPI) showed stalled prices in September. Economists noted the index stalled on a month-over-month basis, but produced annual gains. The annual gains however, don’t mean what most people are likely to conclude.
Canadian Real Estate Prices Are Flat From Last Month
The C11, an aggregate of Canada’s largest urban markets, was “flat” according to the index. Prices increased 0.05% in September, when compared to the month before – virtually “flat.” The annual increase accelerated to 2.14%, but remember the monthly number didn’t change. Analysts from the Bank reminded us that last year we saw prices fall in September. The annual acceleration is due entirely to that decline. Stagnating is better than dropping, but the acceleration can be a little misleading.
Teranet-National Bank HPI C11 (Annual Change)
Composite aggregate of home prices in Canada’s 11 largest cities.
Source: National Bank of Canada, Teranet, Better Dwelling.
Toronto Real Estate Prices Fall Less Than A Point From Last Year
Toronto real estate prices made a slight decline, but only gave up less than a point. Prices fell -0.10% in September, when compared to the month before. The annual change is 0.78% lower than the same month last year. Prices in the city are not 3.85% lower than they were at peak in July 2017, mostly due to a rise in condo apartments.
Toronto Real Estate Prices (Teranet-National Bank HPI)
Annual percent change of real estate prices in Toronto.
Source: National Bank of Canada, Teranet, Better Dwelling.
Vancouver Real Estate Prices Stall In September
Vancouver real estate prices stalled monthly, but continued to decelerate annually. Prices were up 0.01% in September, when compared to the month before. The annual pace of growth fell to 6.22%, the fifth consecutive month we’ve seen it decelerate. Prices are 0.34% from the peak obtained in July 2018.
Vancouver Real Estate Prices (Teranet-National Bank HPI)
Annual percent change of real estate prices in Vancouver.
Source: National Bank of Canada, Teranet, Better Dwelling.
Montreal Real Estate Prices Are Making Healthy Increases
Montreal real estate prices are rising on both the monthly and annual trend. Prices increased by 0.48% in September, when compared to the month before. The annual pace of growth is now at 4.85%, the third consecutive month of acceleration. Prices are currently at their all-time high.
Montreal Real Estate Prices (Teranet-National Bank HPI)
Annual percent change of real estate prices in Montreal.
Source: National Bank of Canada, Teranet, Better Dwelling.
Higher interest rates and tighter lending are the big two factors putting a drag on growth. Montreal is still growing at a healthy pace, but it also lagged growth in previous years. Earlier this month UBS said these factors are likely to put a damper on medium to long-term price growth in Toronto and Vancouver.
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One of the most important things to remember here is the previous drops were all because of a recession. There’s no recession so far, and it’s dropping. A global recession is forming, and expected to land in 2020. To spell it out, prices need to rise really fast, while interest rates rise in order to prevent wide scale losses.
Wrong. Bears keep calling for a recession, but the stock market is at highs, and prices around the world are inflating because there’s SO MUCH MONEY. It’s sad that a lot of millennials are left behind, but they’re being left behind because their parents didn’t have the foresight to help establish generational wealth.
Cameron – if your scenario plays out the way you expect prepare for a revolution. If 90% of your population is destitute than they have nothing to lose if they burn everything to the ground.
Lol what stock market is at all time highs right now? Did last week not happen?
Yikes.
Cameron, exactly, TOO MUCH money… borrowed money – $247 Trillion of global debt.
Recession is not the cause but a consequence of a late credit cycle. Interest rates are heading up, money is getting more expensive meaning further credit tightening is coming our way.
That’s why ‘recessions’ are trailing. The 2008 recession wasn’t ‘called’ until sometime in 2009. Recession are like bad strip clubs; you’re usually in one way to long before you realize what is going on. You want to leave/sell but after a $20 lap dance (buying a home) complete with c-section scar (HELOC) and ‘barb wire’ tattoo (car loan), and 2 x $15 beers (unsecured credit) you tell yourself ‘I won’t be here must longer and it can’t get worse’…that was 2 hours ago and now your wallet is missing. Tick tock. BD4L.
Hey sure there is a big game where realtor and agent both playing.
New condos are selling like hotcakes in Vancouver, this is just a temporary stall. Income will catch up over the next few months, and things will be back to normal.
Even if incomes in Vancouver doubled over the next few months the price to income ratio would still be very high.
i think he is being sarcastic
Incomes do not catch up in a few months!!Inflation is pretty much eating away any potential wage growth in Canada.
Would love to know your definition of “back to normal”. The twisted reality is that the average Joe needs to make 300$ per hour to establish an actual “normal” in Vancouver at these prices.
It’s a bubble (GTA/BC), a dying one at that. It already went “pop” and prices will keep heading south in all segments. Real Estate non-industrial complex keeps lying to get suckers to buy…..
“Income will catch up over the next few months”
Income does not simply ‘catch up’ after a few months. How many weekly raises have you (or anyone reading this) ever received. Anecdotally, I can say I’ve never received weekly raises… but maybe your mileage has varied…
I don’t think you’re a avid reader of this site, nor should you be giving out advise to people regarding real estate.
Have a read:
https://betterdwelling.com/canadian-wages-now-growing-slower-inflation-bc-alberta-decline/
Vik you must be a realtor!
The C11 reminds me of the asset bubble chart. No external pressure, now amateurs can say this is the new normal before falling.
What asset bubble chart?
Funny to see all the realtors disguised in average Joe trying to tell us everything will keep rising forever. Look at the selling price data now that it’s available and at the 90% plus listing that stay too long on the market so agent are delisting them. At some point all this supply will have to be sold and with higher interest prices can only go down
I don’t care a rat’s ass about whatever is going on because I have plenty of money in cash and investments including savings, stocks, bonds, and outright own my condo and have a stream of steady income from various sources. Most of you who are fretting are either suffering from clinical anxiety, are overextended, have no “skin in the game”, are precariously employed, are not capable of risk taking, whatever. If there’s a crash I am diversified enough to sustain it unless WWIII erupts which doesn’t worry me because we will all be dead if that happens and no more worries about anything.
Don’t feed the trolls. Tick tock. BD4L.
I think articles like this one and similar ones feed trolls who perpetually predict gloom and doom from their black crystal balls, probably located down below. I have been through real estate, stock market, and other investment bubbles, crashes, corrections, declines, rises, etc., and more than just survived. It is important to not throw all your eggs into one basket because all the eggs will break when the basket drops.
hey, there is nothing fundamentally wrong with what Contrarian is saying. there are some good take always in what he is saying.
Damn trolls predicting a fall in real estate, can you imagine? LOL
Thought trolls were the ones pumping real estate?
What if your condo’s corp goes into receivership? Banks repossess a ton of units, stop paying monthly condo fees…there is no money to fix things when they break. Maintenance does not happen. Squatters find their way in to some units on your floor. Things can get sucky real fast, even in luxury towers. Saw it happen to many friends in Miami high rises in 2008 recession. Yeah it was only a few years before the lawyers played nice, and civilization returned, but that can feel like a life time when you’re in it. Nobody is totally insulated from mayhem when crap hits the fan. Unless you hop on a plane and leave and don’t come back until sky’s are rosy again. Stephen Harper’s so called “anywheres.”
“I don’t care a rat’s ass about whatever is going on because I have plenty of money in cash and investments including savings, stocks, bonds, and outright own my condo and have a stream of steady income from various sources.”
Why come here and argue? just live life then, save the time and effort required to comment for more productive endeavors…..
To be honest you sound incredibly worried, good luck!
No worries at all.
lot of houses showing up that have been bought in the past few months that people are trying to offload at cost or lower. Apart from a few hot areas downtown prices are actually falling quite hard. Oakville is another example where prices are slowly coming back to reality. I put in an offer for a house it was outbid but then the accepted offer fell through for financing. The same house had three more higher offers that all fell through because of financing. The agent called me back saying he would consider my offer. I told him it was 40k lower now. I also told him for every increase in interest rates my offer would be 40k lower. He wont call me back and his listing wont sell either. Higher interest rates will collapse prices hard. This is simple economics.
Well said!
If banks are lending less, then homebuyers have less to spend. After all most people borrow money from the bank to purchase homes.
You may be surprised, you may be contacted again. That happened to me in 1983 when I was looking forr my second home. Edwardian style, detaced, brick, 4 bedroom, in Toronto’s High Park, listing price was $189K, I offered $149K. The seller said they were “insulted” and rejected my offer. I knew the seller had bought a much more expensive house that was closing in a few weeks and there were no other offers. A week before the seller’s closing on their home puchase I got a phone call from my agent asking if I was still interested, I got that house for $140K.
good call i was contacted again. I was the only offer without a finance clause so I low balled by another 30k. Waiting to hear back. A lot of people still hoping for 2017 prices. The longer they hold the worse the prices will get. Only tough part now is that a lot of people have built up ridiculous equity through condo appreciation. The smart ones that are selling now have a lot of cash to outbid the general market. I feel bad for the future bag holders buying 1 bed condos for half a million now though. Once 2019 condo supply feeds in with higher rates we will see a lot of this falling. Once that equity dries out the detached market will see some major falls