Calgary had the best year-over-year price growth for repeat home sales in October, according to the Teranet-National Bank National Composite House Price Index.
The index, which was released Wednesday, said Calgary prices were up 6.7 per cent from a year ago while the national composite of 11 centres showed an annual increase of 3.1 per cent.
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.
On a monthly basis, prices rose by 0.9 per cent in Calgary and by 0.1 per cent nationally.
Four markets exceeded the national average for year-over-year price growth – Calgary, Hamilton (4.6 per cent), Toronto (4.1 per cent) and Quebec City (3.8 per cent). The annual increase lagged in Vancouver (2.7 per cent), Edmonton (2.2 per cent), Winnipeg (2.0 per cent), Montreal and Ottawa-Gatineau (0.9 per cent). Prices were down for an eighth straight month in Victoria (0.5 per cent) and for a third month in a row in Halifax (0.7 per cent).
On a monthly basis, the index increased in three of the regions covered – Vancouver (1.1 per cent), Halifax (1.0 per cent) and Calgary. Prices declined in Montreal and Winnipeg (0.1 per cent), Toronto (0.2 per cent), Edmonton (0.3 per cent), Quebec City (0.4 per cent), Ottawa-Gatineau (0.5 per cent), Victoria (0.6 per cent) and Hamilton (0.8 per cent).
Calgary’s residential real estate market is showing no signs of slowing down in November. According to the Calgary Real Estate Board, month-to-date until Tuesday, total MLS sales of 692 in the city are up 31.56 per cent compared with the same period last year and the average sale price has jumped by 8.62 per cent to $464,596.
“Annual home price inflation (in Canada) may have accelerated to 3.1 per cent in October but we doubt that there is significant upside going forward. Even if 12-month inflation will continue to benefit from a favourable base effect through February 2014 – recall that home prices declined in six consecutive months after the introduction of more stringent homeownership rules in July 2012 – the fact still remains that the 0.1 per cent monthly increase recorded in October was weaker than normal,” said Marc Pinsonneault, economist with the National Bank.
“What’s more, prices failed to grow on a monthly basis in at least eight regions. This is a development usually associated with price weakness. Resale activity has picked up in recent months, but it seems that households are bargaining harder on prices to compensate for higher mortgage rates.”
Amna Asaf, economist with Capital Economics, said the national pick-up in house price growth had a lot to do with the latest surge in existing home sales, which has been driven by fears of higher mortgage rates.
“With the five-year conventional mortgage rate essentially unchanged at 5.34 per cent since August, that kind of boost to sales cannot be expected to last too long. Apart from higher sales, lower supply of homes listed for sale has dampened the months’ supply of inventory, which suggests that house price growth is likely to accelerate in the next few months.”