The new Repeat Sale Price Index ( RSPI) tells an interesting story about house prices at the city level. Calgary is down 7% year-over-year while the other five cities in the RSPI are up 4.9% to 6%. Excluding Calgary, it would appear house prices in Canada have held up fairly well to date. Table 1 below has more detail.
But the year-over-year rate is decelerating in all six cities. The Teranet-National Bank websitehas some interesting graphs of the trends. It wouldnt be surprising to see the rate of change get close to zero in months ahead given momentum in the series. And economic conditions are still deteriorating.
Calgary and Vancouver have been slowing down since late 2006 when they peaked at 40% and 25% year-over-year gains, respectively. For these cities, late 2006 and 2007 wouldhave beenopportune times to sell and switch to renting (or move to another city) — see Rent or buy?(22 Aug., 2006). The other four cities are slowing down from intermediate peaks near 9%, established in early 2008 or so.
Cumulative price gains over past years remain high. As can be seen in Table 2, house prices in Vancouver, Calgary and Montreal are still more than double what they were in June 1999. Ottawa and Halifax are up about 85%. Toronto, which has had the least volatility in prices of the cities, registers a 65% increase.
Table 1: Year-over-year house price changes (Oct. 2007 to Oct. 2008) Vancouver 4.9% Calgary -7% Toronto 5.6% Ottawa 5% Montreal 6% Halifax 5.5%
Table 2: Change in house prices since June, 1999 Vancouver 120% Calgary 132% Toronto 65% Ottawa 86% Montreal 106% Halifax 84%