Price growth for Canadian homes soared by a record amount last month.
According to the most recent update to the Teranet–National Bank National Composite House Price Index (HPI) — which covers 11 Canadian census metropolitan areas (CMAs) — home prices increased 18.8 per cent year-over-year in April, a new record. This breaks the previous record growth rate of 18.4 per cent that was observed in March and in August 2021.
April’s record-breaking growth to the composite was mostly driven by annual increases in Halifax (34.8 per cent), Hamilton (28.9 per cent), Victoria (22.5 per cent) and Toronto (22.5 per cent.) The other seven CMAs included in the composite recorded lower than average yearly increases ranging between four and 18 per cent.
Daren King, an economist with the National Bank of Canada, said in the report that this price growth record is “peculiar,” as Halifax was the only city in the Composite 11 Index that saw record annual growth this month.
“This new high is therefore the result of robust growth in all regions,” King noted.
The Teranet–National Bank HPI is an independent representation of changes to Canadian single-family home prices by the National Bank of Canada and Teranet Inc. The measurement is based on sale price data taken from property records of public land registries. Using repeat sales methodology, all homes that have been sold at least twice are factored into the HPI calculation, which tracks price changes between two sales of the same property.
Of the total 32 markets analyzed in the report — which includes 20 other Canadian CMAs in addition to the 11 cities in the composite — 87 per cent experienced annual price growth of 10 per cent or more in April.
On a monthly basis, the Teranet–National Bank National Composite HPI rose two per cent after seasonal adjustment between March and April, a similar level to the previous two months and one of the strongest monthly increases ever recorded after May 2021. Ten of the composite’s 11 markets reported an increase in April, particularly in Halifax, Hamilton and Ottawa-Gatineau, where the composite index grew 3.9 per cent, 2.8 per cent and 2.7 per cent monthly. The exception was Edmonton, which was down 0.4 per cent.
Before seasonal adjustment, the Teranet–National Bank National Composite HPI jumped 2.7 per cent month-over-month, higher than 2.1 per cent in March and second-highest monthly growth on record after May 2021. For the other CMAs not included in the composite index, growth was observed in all 20 of them.
King noted in the report that strong price growth is anticipated to fade soon. This coincides with a slowdown in the resale market that has been tracked over the past few months and as the monthly growth to the index reaches a ceiling.
“Since the Teranet-National Bank HPI is compiled from transactions recorded in the land register, there may be a lag of one or two months with the statistics published by the real estate boards, which are recorded at the time of the purchase offer,” he explained. “We should therefore see a stabilization of prices in the coming months.”
