A national measure of home price variations has confirmed stabilization following a downward trend through the second half of 2017.
The Teranet-National Bank National Composite House Price Index was up 1.0% in May compared to April, almost in line with the 1.1% average monthly gain for May during the past 20 years.
Victoria led the gains (1.8%) followed by Ottawa-Gatineau (1.7%), Toronto (1.3%), Winnipeg (1.3%) and Vancouver (1.0%).
There were also increases for Edmonton (0.7%), Quebec City (0.6%), Hamilton (0.4%), Calgary (0.4%) and Montreal (0.3%) while Hamilton saw no change.
“It is true that this stabilization was accompanied by a shift of price momentum in favor of condos in Toronto and Vancouver. Given the high price level for other types of dwellings in these cities, rising interest rates and tighter mortgage underwriting standards, this shift should not be surprising,” the report says.
However, it notes that there has not been a decline for other property types in these markets. Elsewhere, markets have regained most of the ground lost in the first quarter.
“Given that interest rates are likely to continue to increase, a relapse of home prices over the next few quarters cannot be ruled out. But their resilience so far suggests that price declines would then be limited in scope,” the report adds.
The index shows percentage gains and losses based on an index value of 100 in June 2005.