July 12, 2017
Home prices still rising in June
Teranet-National Bank House Price IndexTM
Composite Index and sub-indexes. Last observation: June 2017
m/m growth: Latest: +2.6% prior month: +2.2%
y/y growth: Latest: +14.2% prior month: +13.9%
32
HAM
20
Price IndexTM rose 2.6% in June. As with May, it was the largest
June rise in the 19-year history of the index. Home prices rose
in ten of the 11 metropolitan regions covered, led by Hamilton
(+4.1% - a record monthly rise), Toronto (+3.7% - also a record)
and Quebec City (+3.7%). Price gains were also impressive in
Vancouver (+2.5%), Victoria (+2.2%), Edmonton (+1.8%),
Halifax (+1.7%), Montreal (+1.6%) and Ottawa-Gatineau
(+1.2%). Prices were up moderately Calgary (+0.3%) and down
on the month in Winnipeg (-0.3%). On a y/y basis, the national
index was up a record 14.2% (top chart). The 12-month
increase was led by Toronto (+29.3% - a record), Hamilton
(+25.6% - also a record) and Victoria (+17.4%). Although
strong, Vancouver’s gain (+8.1%) was well below the
countrywide average. Gains over a year earlier were much
smaller in Ottawa-Gatineau (+3.3%), Montreal (+2.2%),
Halifax (+1.8%), Winnipeg (+1.0%) and Calgary (+1.4%). Prices
were down from a year earlier in Edmonton (-0.1%) and
Quebec City (−0.6%). See charts on next page.
Marc Pinsonneault
TOR
24
FACTS: The Teranet–National Bank National Composite House
OPINION: The slowdown in Toronto home prices that is
expected to result from the implementation of the Fair Housing
Plan by the Ontario government has yet to be seen. But given
the effect of the Plan on home sales and listings (middle chart),
it should only be a matter of time. In the meantime, home
prices still give the impression of a dichotomy on the Canadian
residential market, the Composite index being pulled by
Toronto, Hamilton and Victoria (top chart). Furthermore, the
seven Golden Horseshoe regions for which price indexes are
available (but not incorporated into the Composite index)
display home price increases well over 20% on a year-over-year
basis (bottom table). But outside Ontario and B.C., home
price rises over the last 12 months are modest if not negative,
ranging from -0.6% in Quebec City to +3.3% in OttawaGatineau.
%y/y
28
VIC
16
Composite
12
8
VAN
4
0
7 other
metropolitan
areas
-4
-8
-12
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
NBF Economics and Strategy (Data from Teranet-National Bank House Price Index)
Toronto: Home sales and new listings
Last observation: June 2017
Thousand units
Ratio
New listings (R)
18
16
14
12
10
8
Sales (R)
6
4
4.5
2
4.0
3.5
New listings to sales
3.0
2.5
Buyers’ market
2.0
Balanced market
1.5
Sellers’ market
1.0
1990
1995
2000
2005
2010
2015
NBF Economics and Strategy (Data from TREB seasonally adjusted by NBF)
GTA and Golden Horseshoe Regions - Home Price Growth
%y/y
Latest trend
GTA
29.3
Gains in 17 straight months
Hamilton
25.6
Gains in 16 straight months
Oshawa
34.2
Gains in 16 straight months
Barrie 37.0
Gains in 16 straight months
St. Catharines‐Niagara
27.2 Gains in 15 of the last 16 months
Peterborough
28.4
Gains in 16 straight months
Kitchener‐Cambridge‐Waterloo 26.4 Gains in 15 of the last 16 months
Brantford
22.9 Gains in 15 of the last 16 months
Guelph
22.4 Gains in 15 of the last 16 months
HPI based on the Teranet‐National Bank HPI methodology.
Teranet-National Bank
House Price Index
Teranet-National Bank National Composite House Price IndexTM
12-month % change
June 2005 = 100
20
220
18
210
16
200
14
Index (R)
12-month change (L)
12
190
180
10
170
8
160
6
150
4
140
2
130
0
120
-2
110
-4
100
-6
90
-8
80
-10
70
-12
60
2000
2002
2004
2006
2008
June 2005 = 100
June 2005 = 100
12-month change (L)
14
28
220
12
200
Index (R)
8
20
180
16
160
6
4
140
2
120
0
4
0
80
60
2002
2004
2006
2008
2010
2012
2014
1998
2000
Quebec City
2004
2006
2008
2010
2012
2014
Index (R)
160
12-month change (L)
4
Index (R)
6
4
90
0
-4
2010
2012
2014
-4
2000
2002
2004
Halifax
2006
2008
2010
2012
2014
26
240
220
22
20
200
120
100
0
100
-4
80
-4
80
18
16
180
12-month change (L)
14
60
-8
-12
Index (R)
150
2000
2002
2004
2006
12
160
140
6
2010
2012
2014
2016
120
2
22
180
35
25
120
20
Index (R)
12-month change (L)
40
170
160
150
140
130
120
15
110
100
5
90
0
80
-5
70
-10
80
70
200
Index (R)
180
12-month change (L)
160
2000
2002
2004
2006
2008
2010
2012
2014
2016
12-month % change
6
80
-2
120
100
-4
60
1998
2000
2002
2004
2006
2008
2010
2012
2014
2016
80
-4
60
1998
2000
2002
2004
2006
2008
2010
2008
2010
2012
2014
2016
12-month % change
June 2005 = 100
190
50
Index (R)
45
180
170
40
160
35
150
30
140
25
20
15
130
12-month change (L)
120
110
10
100
5
90
0
80
-5
70
-10
60
2000
2002
2004
2006
2008
2010
2012
2014
2016
210
200
18
Index (R)
14
2012
2014
2016
190
180
170
12-month change (L)
12
160
150
10
140
130
6
120
4
110
2
100
90
0
0
0
-2
2006
June 2005 = 100
20
8
140
8
2
2004
60
16
20
100
2002
Edmonton
4
4
2000
190
130
220
12
1998
June 2005 = 100
50
30
10
10
8
2008
12-month % change
140
240
14
40
-12
2016
26
16
60
-8
40
1998
June 2005 = 100
18
140
0
24
24
160
Winnipeg
12-month % change
June 2005 = 100
180
8
100
Hamilton
12-month % change
200
4
60
1998
2016
12
220
Index (R)
120
90
-2
60
2008
140
10
0
70
16
160
Index (R)
240
12month
change
(L)
4
100
80
-2
20
120
110
2
100
220
260
140
160
110
2
24
180
8
28
240
200
45
8
120
2006
12
170
10
140
2004
180
12-month
change (L)
June 2005 = 100
12-month % change
Calgary
150
2002
16
260
180
12
130
2000
200
June 2005 = 100
14
170
6
1998
20
2016
180
12month
change
(L)
8
2002
12-month % change
June 2005 = 100
14
10
June 2005 = 100
Ottawa–Gatineau
12-month % change
12
220
60
-8
2016
24
80
-4
-4
240
160
8
-2
2000
12-month change (L)
12
100
-6
Index (R)
24
10
2016
Vancouver
12-month % change
28
32
240
2014
Victoria
12-month % change
18
1998
2012
Toronto
Montreal
12-month % change
16
2010
80
-2
70
-4
60
1998
2000
2002
2004
2006
2008
2010
2012
2014
2016
2
Teranet-National Bank
House Price Index
Economics and Strategy
Montreal Office
514-879-2529
Stéfane Marion
Marc Pinsonneault
Kyle Dahms
Chief Economist and Strategist
Senior Economist
Economist
[email protected]
[email protected]
[email protected]
Paul-André Pinsonnault
Matthieu Arseneau
Senior Fixed Income Economist
Senior Economist
[email protected]
[email protected]
Toronto Office
416-869-8598
Krishen Rangasamy
Angelo Katsoras
Warren Lovely
Senior Economist
Geopolitical Analyst
[email protected]
[email protected]
MD, Public Sector Research and Strategy
[email protected]
General – National Bank Financial (NBF) is an indirect wholly owned subsidiary of National Bank of Canada. National Bank of Canada is a public company listed on Canadian stock exchanges.
The particulars contained herein were obtained from sources which we believe to be reliable but are not guaranteed by us and may be incomplete. The opinions expressed are based upon our analysis
and interpretation of these particulars and are not to be construed as a solicitation or offer to buy or sell the securities mentioned herein.
Research Analysts – The Research Analyst(s) who prepare these reports certify that their respective report accurately reflects his or her personal opinion and that no part of his/her compensation was,
is, or will be directly or indirectly related to the specific recommendations or views as to the securities or companies.
NBF compensates its Research Analysts from a variety of sources. The Research Department is a cost centre and is funded by the business activities of NBF including, Institutional Equity Sales
and Trading, Retail Sales, the correspondent clearing business, and Corporate and Investment Banking. Since the revenues from these businesses vary, the funds for research compensation vary.
No one business line has a greater influence than any other for Research Analyst compensation.
Canadian Residents – In respect of the distribution of this report in Canada, NBF accepts responsibility for its contents. To make further inquiry related to this report, Canadian residents should contact their
NBF professional representative. To effect any transaction, Canadian residents should contact their NBF Investment advisor.
U.S. Residents – With respect to the distribution of this report in the United States, National Bank of Canada Financial Inc. (NBCFI) is regulated by the Financial Industry Regulatory Authority (FINRA) and a
member of the Securities Investor Protection Corporation (SIPC). This report has been prepared in whole or in part by, research analysts employed by non-US affiliates of NBCFI that are not registered as
broker/dealers in the US. These non-US research analysts are not registered as associated persons of NBCFI and are not licensed or qualified as research analysts with FINRA or any other US regulatory authority
and, accordingly, may not be subject (among other things) to FINRA restrictions regarding communications by a research analyst with the subject company, public appearances by research analysts and trading
securities held a research analyst account.
All of the views expressed in this research report accurately reflect the research analysts’ personal views regarding any and all of the subject securities or issuers. No part of the analysts’ compensation was,
is, or will be, directly or indirectly, related to the specific recommendations or views expressed in this research report. The analyst responsible for the production of this report certifies that the views expressed herein
reflect his or her accurate personal and technical judgment at the moment of publication. Because the views of analysts may differ, members of the National Bank Financial Group may have or may in the future
issue reports that are inconsistent with this report, or that reach conclusions different from those in this report. To make further inquiry related to this report, United States residents should contact their NBCFI
registered representative.
UK Residents – In respect of the distribution of this report to UK residents, National Bank Financial Inc. has approved the contents (including, where necessary, for the purposes of Section 21(1) of the Financial
Services and Markets Act 2000). National Bank Financial Inc. and/or its parent and/or any companies within or affiliates of the National Bank of Canada group and/or any of their directors, officers and employees
may have or may have had interests or long or short positions in, and may at any time make purchases and/or sales as principal or agent, or may act or may have acted as market maker in the relevant investments
or related investments discussed in this report, or may act or have acted as investment and/or commercial banker with respect thereto. The value of investments can go down as well as up. Past performance will not
necessarily be repeated in the future. The investments contained in this report are not available to retail customers. This report does not constitute or form part of any offer for sale or subscription of or solicitation of
any offer to buy or subscribe for the securities described herein nor shall it or any part of it form the basis of or be relied on in connection with any contract or commitment whatsoever.
This information is only for distribution to Eligible Counterparties and Professional Clients in the United Kingdom within the meaning of the rules of the Financial Conduct Authority.
National Bank Financial Inc. is authorised and regulated by the Financial Conduct Authority and has its registered office at 71 Fenchurch Street, London, EC3M 4HD.
National Bank Financial Inc. is not authorised by the Prudential Regulation Authority and the Financial Conduct Authority to accept deposits in the United Kingdom.
HK Residents – With respect to the distribution of this report in Hong Kong by NBC Financial Markets Asia Limited (“NBCFMA”)which is licensed by the Securities and Futures Commission (“SFC”) to conduct
Type 1 (dealing in securities) regulated activity, the contents of this report are solely for informational purposes. It has not been approved by, reviewed by, verified by or filed with any regulator in Hong Kong.
Nothing herein is a recommendation, advice, offer or solicitation to buy or sell a product or service, nor an official confirmation of any transaction. None of the products issuers, NBCFMA or its affiliates or other
persons or entities named herein are obliged to notify you of changes to any information and none of the foregoing assume any loss suffered by you in reliance of such information.
The content of this report may contain information about investment products which are not authorized by SFC for offering to the public in Hong Kong and such information will only be available to, those persons
who are Professional Investors (as defined in the Securities and Futures Ordinance of Hong Kong (“SFO”)). If you are in any doubt as to your status you should consult a financial adviser or contact us.
This material is not meant to be marketing materials and is not intended for public distribution. Please note that neither this material nor the product referred to is authorized for sale by SFC. Please refer
to product prospectus for full details.
There may be conflicts of interest relating to NBCFMA or its affiliates’ businesses. These activities and interests include potential multiple advisory, transactional and financial and other interests in securities and
instruments that may be purchased or sold by NBCFMA or its affiliates, or in other investment vehicles which are managed by NBCFMA or its affiliates that may purchase or sell such securities and instruments.
No other entity within the National Bank of Canada group, including NBF, is licensed or registered with the SFC. Accordingly, such entities and their employees are not permitted and do not intend to:
(i) carry on a business in any regulated activity in Hong Kong; (ii) hold themselves out as carrying on a business in any regulated activity in Hong Kong; or (iii) actively market their services to the Hong Kong public.
Copyright – This report may not be reproduced in whole or in part, or further distributed or published or referred to in any manner whatsoever, nor may the information, opinions or conclusions contained in it be
referred to without in each case the prior express written consent of National Bank Financial.