March 2018 Teranet-National Bank House Price Index™ Stays Flat, Toronto Market Pauses

April 23rd, 2018

House prices stayed flat in March of 2018, according to data from the Teranet-National Bank House Price Index™.

This past month was the first time outside of a recession that the March composite index wasn’t up at least 0.2 percentage points from February and the first time outside of a recession when March indexes were only up for four of the 11 metropolitan markets.

The Toronto region was flat, and six other markets were down for the month.

Vancouver’s house price index increased — its 13th month-over-month increase in the past 15 months, taking prices to a new high. In comparison, the Toronto market was flat in March and over the past 15 months has gone down 7.3 per cent from its house price peak in July of 2017. In Toronto, however, its condo segment has remained unchanged since July.

The increase in Vancouver was the main reason the house price index stayed flat in March and didn’t decline overall.

“Without Vancouver, the composite index would have declined in March, and in five of the six preceding months,” National Bank economist Marc Pinsonneault said in a research note.

Vancouver’s index is expected to see more increases over the coming months. The average Vancouver region sale price was a record $906,896 in March.

Outside of Vancouver and Toronto, other markets continue to vary. Winnipeg, Quebec City, and Victoria all showed increases in March, but Montreal, Hamilton, Calgary, Ottawa-Gatineau, Halifax, and Edmonton were all down. In Ontario, Barrie, Guelph, Brantford, Kitchener, St. Catharines, Oshawa, and Sudbury all showed declines from last July.

Hamilton has particularly declined, dropping 5.9% cumulatively since August of 2017.

The March 2018 house price index was notable for two other reasons: it’s the smallest 12-month rise since May of 2016, and it’s the ninth consecutive deceleration from the record 14.2% of last June.

According to Pinsonneault, the flat reading in March reflects that both the Toronto and Vancouver housing markets have begun to flatten out.

“The decline was the most obvious in Toronto,” he wrote. “This drop was likely triggered by Ontario’s implementation of the 15 per cent [foreign buyer tax] followed by stricter rules for qualification for a mortgage and a rise in mortgage rates.”

Pinsonneault wrote that we could see national home prices remaining relatively even in the coming months.

A TD Bank commentary on the March house price index noted that mortgage rates have recently fallen, making the overall cost of ownership less expensive for buyers.

TD Economics analyst, Sonny Scarfone, provided further analysis to the Canadian Press.

“Markets experiencing a decline in home prices are facing a rising inventory of homes for sale on the market, following what appears to have been a number of years of over building,” Scarfone wrote.

“Meanwhile, home price pressures remain the strongest in cities facing tighter conditions — as a low number of homes for sale on the market has put the bargaining power in the hands of the seller. This is particularly true in Calgary and the single-family home market in Toronto. However, these cities also have a record number of new homes currently under construction, which should help alleviate some supply pressures in the coming months.”

See the full March 2018 House Price Index report at

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