Falling Toronto market sinks Teranet house-price index
Falling housing prices in Toronto in September dragged down the Teranet-National Bank national composite house-price index as it posted its first monthly decline since January, 2016.
The national index, which includes 11 cities, fell 0.8 per cent compared with the previous month, the largest monthly decline since September, 2010.
The move lower came as the index for Toronto, Canada’s largest housing market, fell 2.7 per cent on a month-over-month basis.
David Madani, senior Canada economist at Capital Economics, said a sharper slowdown in price inflation in the coming months is unavoidable.
“With interest rates on the rise and mortgage financing rules likely to be tightened significantly later this year, the worst is still to come,” said Mr. Madani, who has been long-time bear on the housing market.
Housing sales in Toronto have fallen since April, when the On- tario government moved to cool the hot housing market with a package of changes including the introduction of a tax on foreign buyers.
The Bank of Canada has also raised its key interest-rate target twice this year, prompting the big banks to raise their prime rates, pushing the cost of variable-rate mortgages higher. The costs of new fixed-rate mortgages have also climbed in recent months, as yields on the bond market have risen.
In addition to Toronto, the price index for Quebec City lost 2.3 per cent, while Hamilton slipped 1.9 per cent, Halifax dropped 0.4 per cent and Winnipeg lost 0.3 per cent.
The index for Victoria was flat, while Vancouver increased 1.3 per cent, Calgary added 0.7 per cent, Montreal climbed 0.3 per cent, Ottawa-Gatineau gained 0.3 per cent and Edmonton edged up 0.2 per cent.
Compared with a year ago, the national composite house-price index was up 11.4 per cent.