A major housing price index ticked upwards last month, which, according to one economist, could be a sign that the Canadian housing market is warming up.
The Teranet-National Bank Composite National Price Index rose 0.2 per cent in April, following a flat March.
“After a difficult [second half of] 2017, the Composite Index has stabilized in recent months,” writes National Bank’s Marc Pinsonneault, in a recent note.
Eight of the 11 cities that comprise the index recorded price increases in April, with Quebec City leading the charge with a 1.5 per cent jump. On a year-over-year basis, the index rose by 5.6 per cent.
“Moderate rises will likely continue to characterize the index over the coming months, as conditions in the two major constituent home resale markets, Toronto and Vancouver, are now balanced,” writes Pinsonneault. Both markets saw a drop in activity at the beginning of the year, with the introduction of a new mortgage stress test.
Pinsonneault writes that, while activity has balanced out and price increases are predicted to continue, the market is unlikely to return to the frenzied levels of last year.
“Let’s recall that over the last two preceding years, conditions in both markets were very tight, triggering double-digit percentage increases in the composite index on a year-over-year basis,” he writes. “We do not think that market conditions will deteriorate significantly from now on in both markets, as sales seem to have stabilized lately.”