Calgary prices for repeat home sales on the rise

Prices for repeat home sales in Calgary were up 5.5 per cent in April compared with a year ago, according to the Teranet-National Bank National Composite House Price Index.

The index, released Tuesday, also said prices in the city increased by 1.2 per cent from the previous month.

The index is estimated by tracking ob­served or registered home prices over time using data collected from public land registries. All dwellings that have been sold at least twice are considered in the calculation of the index.

Nationally, in 11 markets surveyed, prices were up 2.0 per cent on an annual basis and by 0.2 per cent month-over-month.

The year-over-year hike in Canada was the smallest 12-month rise since November 2009.

“By way of comparison, the Case-Shiller home price index of 20 U.S. metropolitan markets was up 9.3 per cent from a year earlier in February (the latest available reading),” said the Teranet-National Bank report.

In Canada, the rise over the 12 months ending in April exceeded the cross-country average in seven of the 11 markets surveyed for the national composite index: Quebec City (6.1 per cent), Calgary (5.5 per cent), Hamilton (5.4 per cent), Winnipeg (4.4 per cent), Toronto (4.3 per cent), Edmonton (3.6 per cent) and Halifax (2.8 per cent).

The report said price increases lagged the average in Ottawa-Gatineau (1.5 per cent) and Montreal (1.3 per cent). Prices were down from a year earlier in Victoria (3.3 per cent) and Vancouver (1.5 per cent). For Vancouver it was the ninth month of 12-month deflation.

Amna Asaf, economist with Capital Economics, said house price growth in Calgary and Edmonton have continued to accelerate, following from their housing downturn of two years ago.

“Although house prices rose in most of the cities, we suspect that as home sales drop, the former will eventually respond,” said Asaf. “Based on the figures already reported by the regional real estate boards, both Toronto and Vancouver posted fewer existing home sales in April compared to a year ago, although the pace of decline has eased. We suspect that national existing home sales . . . may have dropped at a more modest pace of around two per cent year-on-year.

“If we are correct about declining home sales this year, the month’s supply of inventory is likely to rise much further. Accordingly, we suspect that house prices will eventually begin to decline outright.”

On Tuesday, federal Finance Minister Jim Flaherty said he has no plans to intervene in Canada’s housing market, which he says is unfolding in a healthy way.

While some observers are expressing fears the bubble is about to burst, Flaherty said the market is responding the way he envisioned when he tightened lending rules last year.

The Teranet-National Bank index said the national monthly change was the weakest in the 15 years since the inception of the index with the exception of April 2009 when the country was in recession.

“In three markets considered lively, the monthly gain exceeded one per cent: Winnipeg (1.3 per cent), Edmonton (1.3. per cent), Calgary (1.2 per cent). Excluding these three regions, the Composite index would have been flat in April. Lesser monthly increases were recorded in Hamilton (0.6 per cent), Montreal (0.5 per cent) and Toronto (0.4 per cent). Prices were down from the month before in five markets: Vancouver (0.8 per cent), Quebec City (0.5 per cent), Ottawa-Gatineau (0.2 per cent) and Victoria and Halifax (0.1 per cent).”

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