MONTREAL ― Call it a case of trading places.
The latest house price index from Teranet and the National Bank of Canada shows house prices have started rising in Vancouver, after more than a year of declines, while Toronto clocked a surprise decline in October.
House prices dropped by 0.2 per cent in October in Toronto, while rising the same amount in Vancouver ― the first time that city has seen an increase in 15 months.
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“This is consistent with the strong revival of Vancouver home sales since August,” National Bank economist Marc Pinsonneault wrote in a client note.
All the same, Vancouver house prices are still 7.2 per cent lower than their peak in July 2018, and it’s that decline that many experts say made it possible for buyers to jump back into the market. National Bank’s housing affordability monitor shows the price decline is returning home affordability to more normal levels in the city.
Toronto house prices are 4.1 per cent higher than a year ago, and some analysts say that the city’s accelerating population growth will keep the city’s housing shortage going.
Like in Vancouver, affordability has improved in Toronto, thanks to lower mortgage rates this year.
Overall, six of the 11 major metro areas covered by the index saw a decline in prices in October, including Edmonton (down 1 per cent), Winnipeg (down 0.4 per cent), Hamilton, Ont., (down 0.2 per cent), Calgary and Montreal (both down 0.1 per cent). The index rose in Quebec City (up 0.1 per cent), Ottawa-Gatineau (up 0.2 per cent) and Victoria (up 0.7 per cent).
Halifax saw the strongest jump in prices, up 1.3 per cent ― a very large move for a single month. The evidence is growing that parts of Atlantic Canada are experiencing a housing shortage.
Falling house prices aren’t unusual in October, Pinsonneault noted.
“There are no reasons to believe that October’s drops in these metropolitan areas are the start of a trend. Judging from the most recent data, the resale market remains balanced in Toronto and Winnipeg, and favourable to sellers in Montreal and Hamilton,” Pinsonneault wrote.