Teranet – National Bank House Price Index™– Your Key to Forecasting

Lenders and economists alike turn to house price indices like the Teranet – National Bank House Price Index™ to analyse performance in the housing market and to make predictions for the future. In a very competitive lending environment, lenders from smaller credit unions all the way up to major banks use a preferred house price index or a few house price indices to keep a competitive edge, manage risk and to plan for the future.

House price indices analyse housing sales data and generate index values which are monitored over time. Over time, looking at the data month over month and year over year, trends begin to emerge that economists use to forecast changes in the economy and that lenders use in strategic planning in every aspect of their organizations from underwriting to operations to risk management to product development.

There are many different providers of house price indices and what makes each distinctly difference is their data they use to produce their house price indices and also the formula they are using to arrive at their number.

Before relying on any house price indices – make sure you know where the data comes from! The data source of the house price index you are relying upon is critical because you are relying on this information to help you make important strategic decisions. Some data is more current than others.

The most common data sources for house price indices are as follows:

1.   Tax Assessment Data – Municipalities charge property taxes based on their assessed value of a property. These assessed values are stored in a database and relied upon in some house price indices.

2.    Multiple Listing Service Data – Real estate boards often maintain an MLS system which stores all listings and the sales of all properties in its region. Every time a real estate sales professional lists or sells a property, they add the listing to the MLS. This data is relied upon in some house price indices.

3.    Statistics Canada Data

4.    Land Registry Data – The Teranet – National Bank House Price Index™ relies upon, in the example of Ontario, land registry information from the province of Ontario’s land database. This is a reliable and current source of housing price data available.

You can follow one or all house price indices to have an idea at any point in time where the Canadian housing market stands and what trends that are occurring may or may not impact you. If you would like to register for the Teranet – National Bank House Price Index™ click here: http://www.housepriceindex.ca/default.aspx.

HPI Monthly Report: Home Prices Down 0.3% in November

In November, the Teranet–National Bank National Composite House Price Index™ was down 0.3% from the previous month. It was the first monthly decline in a year. Moreover, it was very broad-based: prices were down in eight of the 11 metropolitan markets surveyed, flat in two and up in only one. Prices fell 1.6% in Halifax, 1.5% in Quebec City, 1.0% in Montreal, 0.7% in Winnipeg, 0.6 % in Ottawa-Gatineau, 0.3% in Toronto and Victoria and 0.2% in Calgary. Prices were flat from the month before in Vancouver and Hamilton and rose 1.1% in Edmonton. It was the first time in two years that prices were up on the month in only one of the markets surveyed.

Since in November 2013 the composite index declined only 0.1%, this November’s 0.3% decline meant that 12‑month home price inflation decelerated from 5.4% in October to 5.2% in November. That countrywide average was largely exceeded in Calgary (9.2%), Toronto (7.3%), Hamilton (7.0%), Edmonton (6.2%) and Vancouver (5.9%). Unsurprisingly, the resale market in these five urban areas is balanced or even tight. The 12-month increase was more moderate in Winnipeg (1.5%), Victoria (1.4%) and Montreal (0.6%). Prices were down from a year earlier in Ottawa-Gatineau (−0.2%), in Quebec City (-0.3%) and Halifax (−1.8%). The composite index has been up from a year earlier for 62 months now, since October 2009. The only one of the 11 markets to match that run is Toronto, though Hamilton comes close with 60 months.

For the full report including historical data, please visit: www.housepriceindex.ca