Home prices register slight fall in November

Canadian home prices fell again in November, the third straight monthly decline and the largest November drop outside of a recession, as Toronto prices fell for the fourth month and Vancouver prices were flat, data showed on Wednesday.

The Teranet-National Bank Composite House Price Index, which measures changes for repeat sales of single-family homes, showed national prices declined 0.5 per cent in November from the month before as four of the 11 cities surveyed weakened.

The index was up 9.2 per cent from a year earlier, a fourth straight deceleration from record gains seen earlier in the year, as government measures to rein in the housing market continued to dampen demand.

In Toronto, prices fell 1.4 per cent on the month. Prices have retreated since the Ontario government levied a foreign buyers tax in April in a bid to cool the market and douse speculation in Toronto and the surrounding area.

Teranet said there were some signs buyers may have increased activity in November in an attempt to complete purchases before new mortgage stress tests are required in January. It also said Toronto’s condo market appears to have regained some strength even as the more expensive detached market remains weak.

In Vancouver, where the B.C. government implemented its own tax on foreign buyers more than a year ago, prices were flat after six consecutive months of record highs, Teranet said. Vancouver’s condo subindex has shown the most strength, notching 10 consecutive monthly gains for a total rise of 19.0 per cent.

Although Vancouver initially slowed after the tax was imposed in August 2016, prices have since regained ground and some economists think the slowdown in Toronto will be similarly short lived.

Meanwhile, the Montreal and Halifax indexes were at record highs, the report showed.

In spite of the recent decline, house prices are still expected to rise about five per cent next year, according to a report by Royal LePage.

In its market survey forecast, the real estate firm says its house price composite, which measures prices in 53 cities, is expected to increase 4.9 per cent next year to $661,919.

Royal LePage said some potential buyers looking to upgrade may delay listing their homes as they will not be able to access sufficient financing for a planned new home, due to the new mortgage stress tests.

However, it said that with further diminished affordability, it is likely that demand for entrylevel properties will surge.

“Insufficient housing supply in Canada’s largest cities will begin to drive significant price increases to higher than normal levels once the market adjusts to the new stress test,” Royal LePage CEO Phil Soper said in a statement.