The latest report of the Teranet-National Bank National House Price Index noted an increase in the resale home prices in the Calgary area this past August. When compared to this past July, the August prices were up 0.4 percent. If you compared this August to August of 2011, the prices were up 0.8 percent. Nationally August prices were up 0.2 percent over July of this year and 4.1 percent over August of 2011. The report was made public this past Wednesday.
Teranet compiles its data by considering home prices, either registered or observed, and collecting the information from various public land registries. All homes that have changed hands at least twice are used in formulating the index.
Looking at the national figures for August, that 0.2 percent was the smallest increase seen in Canada within the last 12 years. In three of the markets surveyed, out of 11 total metro areas, prices in August decreased from the prior month. These included Vancouver at 1.2 percent, Victoria at 0.7 percent and Quebec City coming in at 0.6 percent.
The report noted that seasonal factors do influence monthly changes, so the 12-month change carries a bit more weight. The 4.1 percent increase seen year over year for August showed deceleration for the ninth month in a row in a 12-month inflation cycle. But the only major metropolitan area that showed that deceleration for all of those nine months is Greater Vancouver. That city saw prices decrease by 0.3 percent over August of 2011.
Dave Madani, an economist with Capital Economics, noted that the ten year trend of increasing home prices, with some markets seeing increases of more than 150 percent is now reversing. On a nationwide basis, this past August saw home prices decrease for the first time in over two years. Madani predicts that the prices will hold fairly steady for a few months, but that there is a current slump in home sales, possibly nullifying the predicted soft landing in the market. He expects the housing market will see a price decrease by some 25 percent within a few years.
Vancouver apparently is already seeing the beginnings of its housing correction. Most regions, which have seen more moderate increases than the Greater Vancouver area, are not expected to see as dramatic a drop as predicted for that city. Some other areas have seen sharp rises in prices during the last ten years, among them Halifax, Montreal, Ottawa, Toronto, Winnipeg, Edmonton and Calgary. Price reductions are expected in these areas, but are not expected to be as dramatic.
As far as sales in the Calgary area, MLS figures show that as of mid-September there were 943 sales, which is a 12.93 percent increase over the same time period in 2011. The average sales price has gone down 1.40 percent, with each unit going at an average of $416,444.