Canadian house prices fell for the first time in 17 months in September, the Teranet-National Bank Composite House Price Index showed.
Prices fell 1.1 percent during the month, the first decline since April 2009, according to a report released today by National Bank Financial. Halifax, Nova Scotia prices fell 2.4 percent, followed by a 2.2 percent drop in Calgary, Alberta and a 1.6 percent decline in Toronto.
Housing is slowing after the government made mortgage rules more stringent and Bank of Canada Governor Mark Carney warned about record household debts. The central bank, which raised its benchmark lending rate three times to 1 percent this year, predicted in October housing will cut 0.2 percentage point to growth in 2011, after adding 0.6 percentage point this year.
“September’s drop notwithstanding, we do not think that a significant price correction looms in housing,” Marc Pinsonneault, a senior economist with National Bank, said in a note to clients. “This being said, the high indebtedness of Canadian households and record homeownership rate argues for a much slower pace of home price appreciation in the coming years.”
Bank of Canada data show five-year fixed mortgage rates were the near the lowest in more than 50 years last week.
“Moderation in the residential real-estate market is a good thing, that’s why we tightened up some of the rules this year on high-ratio mortgages,” Finance Minister Jim Flaherty told reporters in Ottawa today. “It’s a healthy thing to have moderation.”
On an annual basis, prices rose 7.9 percent, the smallest gain since January, the report said.
The Teranet index has tracked home-price changes in six Canadian cities — Halifax, Montreal, Ottawa, Toronto, Calgary and Vancouver — since February 2000.
Compared to the September house price drop outlined in this article the Average Price in Niagara was $232,155 or 1.3% above the September 2009 average of $229,190. Our 12 month average price of $225,200 is 7.3% above the September 2009 12 month average of $209,935. Always interesting to watch trends in the larger metropolitan centres as Niagara results generally lag a few months behind National trends.
Categories: Real Estate Market Update