January was a hot month for Metro Vancouver real estate, as average home prices rose 1.2% compared with a month previous.
That’s the highest month-to-month gain in Canada, according to data released February 12 from the Teranet-National Bank Composite House Price Index (HPI).
The HPI, which calculates prices changes for repeated sales of homes, was up 0.2% across Canada. That essentially cancels out the 0.2% decline in December.
Meanwhile, the index only went up in four other metropolitan areas — Victoria (0.9%), Toronto (0.6%), Halifax (0.5%) and Edmonton (0.3%).
“The Canadian housing market remains a regional story. The trends seen in 2014 remained in place in January, with home price strength continuing to be driven by key markets such as Toronto, Vancouver, and Calgary,” TD Economics economist Brian DePratto wrote in a note to investors.
“This story is expected to change in 2015, as home sales have fallen off in Calgary and Edmonton. With time, this softness in sales will catch up to prices.”
He added the Bank of Canada is expected to drop interest rates once again in March — a move that will likely boost affordability.
“On balance, we expect home prices to fall by close to 10% in commodity-driven markets, while growing modestly everywhere else.”
Year-over-year, the HPI rose 5.1% in Vancouver compared with the national average of 4.7%.
The HPI rose great in Toronto (7.4%), Hamilton (7.2%), Calgary (7.1%) and Edmonton (6.1%) compared with Vancouver in terms of annual growth.
In another report released February 12, TD Economics economists Derek Burleton and Diana Petramala wrote uncertainty over the equity market, and declines in oil prices and the Loonie would likely keep some homeowners on the sidelines in 2015.
But the report noted foreign investment in Vancouver, Toronto and Montreal would keep the real estate market brisk in those metropolitan areas.
“We believe that Vancouver will still be viewed as an attractive and safe location for foreign investors,” the report said.
“As such, price growth in the city region is likely to run at a solid clip of 4% on average in 2015.”
