Home prices grew 0.3% month-over-month in Vancouver in March, according to the Teranet-National Bank Composite House Price Index (HPI) released April 14.
This increase brought the Vancouver home price index up to an all-time high. The Canada-wide index, which grew 0.3%, also hit a record high, as did Toronto, which increased 0.3%.
The HPI, which uses repeat sales methodology statistics, grew in eight of 11 metropolitan areas surveyed – the highest number of cities that saw increases in the past seven months.
Victoria home prices dipped 0.2% over the period
Year-over-year, nationwide prices grew 4.7%, after growing 4.4% in February. Nine of 11 cities saw increases over the period. Vancouver was one of only three regions that had increases higher than the national average in the 12 months to March, with prices growing 5.3%. Hamilton prices jumped 8.4% and Toronto prices increased 7.6%.
Admir Kolaj, economic analyst for TD Economics, said March’s year-over-year increase was the first acceleration in home price growth in five months.
“Today’s data release showed that the deceleration in home price growth over the last four months has ebbed, as the recent drop in interest rates are continuing to bolster demand in some of Canada’s largest markets,” Kolaj said. “However, the underlying data indicates that the sharp decline in oil prices has taken a toll on commodity-driven markets.”
He said that although home prices have continued to grow in Edmonton and Calgary, home prices in commodity-dependent regions – including Alberta, Saskatchewan and Newfoundland and Labrador – will likely drop 3-7% through 2015.
In regions with economies that are less commodity-based, the low Canadian dollar, low interest rates and a growing U.S. economy will boost price growth.
“In particular, markets in Ontario and British Columbia are likely to remain healthy – especially for single-family homes – and home price gains will likely maintain some momentum over the next few months.
The Bank of Canada’s next overnight rate announcement, scheduled for April 15, will have an impact on home prices.
“We believe the Bank of Canada will be in no rush to either raise or lower rates in the near term, keeping the interest rate environment accommodative for housing,” Kolaj said.
The Teranet HPI looks at an aggregation of home value changes for homes that have been sold more than once over a particular period of time.
