National housing prices continued their upward trajectory last month, according to the October reading from a house price index.
The latest Teranet-National Bank Composite House Price Index, published Wednesday, shows price growth of 0.1 per cent between September and last month, indicating that demand continues to push prices higher.
But the gain does show a leveling off of sorts (see chart), and is below the 15-year average gain for October (actually, half of the average gain of 0.2 per cent) – showing the market may be cooling.
Real estate watchers have opined that the summer bump in interest rates which is now receding pulled many buyers into the market through September, looking to take advantage of locked-in rates on pre-approved home loans before they expired.
As the pool of those buyers is exhausted and with affordability stretched in many markets, a frosty winter and spring may result, some economists suggest, or perhaps longer.
The index — currently at an all-time high of 159.34 — depicts price changes for repeat sales of single-family homes over time.
According to Canadian Real Estate Association numbers, the average price of home in September topped $385,900, an increase of 8.8 per cent compared with September last year.
The Teranet reading comes ahead of numbers to be released by CREA on Friday which are expected to show continued strength in sales of existing homes in October, as well as gains in average prices.
The number of homes trading hands in September was 18.2 per cent higher than a year earlier when the market dipped, brought on by a tightening of mortgage rules by Ottawa out of concern a bubble may be forming.
It’s a concern that remains a focus for policymakers.
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