Calgary and Ottawa top country in price growth for repeat home sales 1.7% increase in June from May
CALGARY — A monthly price index of repeat home sales shows Calgary and Ottawa as having the highest percentage of month-over-month growth in the country
The Teranet-National Bank National Composite House Price Index, released Wednesday, said house prices in Calgary and Ottawa rose by 1.7 per cent in June from May.
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 metropolitan markets surveyed, the gain was 1.2 per cent.
Year-over-year, Calgary had 3.4 per cent price growth while it was 5.4 per cent across the country.
“The June increase (nationally) takes the index to a new high for the third month in a row,” said the report. “June was also the second consecutive month in which none of the 11 metropolitan markets surveyed showed a price decline from the month before.”
For Calgary, it was the third consecutive strong monthly gain after seven months of decline.
The index is now at an all-time high in eight of the 11 markets surveyed, the exceptions being Victoria, Calgary and Edmonton.
According to the Calgary Real Estate Board, so far this month, from July 1 to July 24, there have been 1,525 total residential MLS sales in the city, up 23.08 per cent from the same period last year and the average sale price has increased by 3.77 per cent to $425,173.
Year-to-date in Calgary, total MLS sales of 13,274 have increased by 16.55 per cent from the same period a year ago while the average sale price has risen by 2.67 per cent to $429,000.
Also on Wednesday, a report released by economist David Madani, of Capital Economics, said housing activity in Canada “is cooling and if this trend continues, as we expect, the typical lag times between activity and prices suggest that house prices might begin to decline outright next year.”
“Given the scope for mortgage interest rates to decline even further, though, there is some near-term upside risk. Nonetheless, we think a housing correction over the longer-term is inevitable and still stand by our earlier view of house prices declining by 25 per cent,” he said.
He said house prices typically respond to changes in housing activity with a lag in the range of five to nine months. Home sales have already begun to ease materially, down by over four per cent over the past two months. This declining sales trend is likely to continue now that federal authorities have tightened mortgage insurance rules further, he explained.
“Overall, the willingness of buyers to pay these historically high house prices now looks to be proving fragile against the increasingly disappointing macroeconomic backdrop,” said Madani, adding “we expect substantial declines in house prices over the next year or two.”
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