Monday Monitor – July 17th House Price Index

The Teranet–National Bank National Composite House Price Index TM rose 2.6% in June, the largest increase for that month in the index’s 19-year history. The table below breaks it down metropolitan areas:

City Hamilton Toronto Quebec City Vancouver Victoria Edmonton Halifax Montreal Ottawa
June Change +4.1% +3.7% +3.7% +2.5% +2.2% +1.8% +1.7% +1.6% 1.2% 

 

Year over year, the national index up a record 14.2%. The hottest markets are Toronto (+29.3%—a record), Hamilton (+25.6%—also a record) and Victoria (+17.4%).

The June stats show that the Ontario government’s Fair Housing Plan intends to put a damper on Toronto house prices. Real new residential construction expenses and housing starts had not yet had a bearing in this regard. Given the plan’s effect on home sales and listings, the impact on prices should be felt soon enough.

 

The implications of these trends impact the net worth of approximately 75% of Canadian households. Residential real estate as an asset class is often the largest holdings within their overall net worth.

First Interest Rate Increase In Seven Years

The Bank of Canada (BoC) hiked its policy rate for the first time in seven years, raising the overnight rate 25 basis points to 0.75%. The BoC acknowledged that inflation remains low. The latest reading showed common core Consumer Price Index (CPI) rising only 1.3% on an annual basis. CPI weakness is considered “temporary”. National Bank Financial Economics continues to project inflation close to 2% by the middle of 2018.

Positive Economic Growth for Canada

This increase couples today’s forecast from the Conference Board of Canada (CBoC) anticipating an increase in GDP (Gross Domestic Product) growth in Canada from July 2017 forward. Housing is a key driver. The CBoC expects the Canadian economy to grow by 2.6% this year, before slowing to 1.9% in 2018. Enjoy the complete Economic Report and Forecast from our partners at National Bank Financial Here.

Monday Monitor May 15th, 2017 “CPI Numbers for Canada”

Monday Monitor for May 15th, 2017

Financial Markets Last Week

With a look at the year-to-date (Y-T-D) comparisons of the major financial markets, the divide between global and international market expectations with their underlying sectors or industries emerges for the first half of 2017. Canada’s main exchange the S&P/TSX60 Composite Index and its two main sectors of energy and financials are challenged by supply and demand forces.  On Friday May 12th, financials stocks were the biggest laggards. Moody’s downgraded six Canadian banks earlier in the week partially due to the concerns over mortgage lender Home Capital. The potential ‘cooling off’ of Canadian real estate ‘hotspots’ is good news. Despite the best efforts of OPEC, global oil supply is experiencing the opposite market forces of Canadian real estate with softening prices due to excess supply. Enjoy the in-depth Monday Monitor review from our partners at National Bank Financial .

The week ahead

The conversation about Canadian real estate markets  continues. Enjoy the detailed analysis by our partners at National Bank Financial (NBF) for our Monday Monitor. The NBF economic analysis includes the Teranet–National Bank National Composite House Price IndexTM which rose 1.2% in April. That progression was supported by rising prices in four of the 11 metropolitan markets surveyed: Toronto (+2.6%), Hamilton (+2.1%), Victoria (+1.5%) and Halifax (+1.4%). With close economic links between real estate, oil and inflation, the week ahead highlight in Canada will be the release of April’s consumer price index. “Higher than normal increases in gasoline prices pushed up headline CPI during the month. As a result, the annual inflation rate is expected to rise two ticks to 1.8%”

Enjoy more economic details and a discussion on the global economic outlook click, here.