Todays release of the Teranet-National Bank National Composite House Price Indexshows a vigorous gain of 2% in Canadian resale house prices from July to August. The national house price index (based on six cities) has now risen four straight months (and likely will show further increases in September and October).
Monthly rises in August were 2.7% in Toronto, 2.0% in Calgary, 1.7% in Vancouver, 1.5% in Ottawa, 1.2% in Montreal and 0.6% in Halifax. For Toronto it was the fourth consecutive rise of 2% or more, taking the cumulative gain to 9.4% in just four months, noted the monthly report from Teranet and National Bank.
Montreal, Halifax and Ottawa prices in August are nowabove their respective peaksattained during the housing boom. August house prices remain below boom-era peaks in Toronto (-3.0%), Vancouver (-7.7%) and Calgary (-12.9%).
This recent leap in house prices is putting housing back into overvalued territory at the national level, going by the IMFmodel. As for traditional valuation yardsticks (as mentioned in the IMF study) the existing state of overvaluation is becomingmore substantial.