Canadian real estate prices have taken an epic flight, but they are starting to lose a bit of steam. The TeranetNational Bank of Canada The house price index (TNBC HPI) showed slight growth in September. The annual rate is still high, but it fell from the record high as a result of the dragging month. Last month’s gains were the smallest since January 2020, with Vancouver even falling from its record high.

Canadian house price growth back to pre-pandemic levels

The C11, an index of the country’s 11 largest real estate markets, showed slowing price growth. The index showed a monthly growth of 0.1% in September. Last month marked the fourth consecutive slowdown for monthly movements. It also happened to be the smallest monthly gain since January 2020. We’re finally back to pre-pandemic growth – at least on a monthly basis.

Canadian house price growth drops to 20-month low

The monthly change of the Teranet National Bank HPI.

Annual growth is still high and just outside the record highs, but last month was a major drag. Last month, 14 months of acceleration for annual growth came to an end. Growth is still so high that the news of a slowdown may not filter through to smaller markets for a while.

National Bank economist Daren King said: “Prices continue to rise 10% or more in 87% of the 32 metropolitan areas surveyed, although some extremely hot markets are starting to cool down.”

Fewer Canadian real estate markets report strong growth

The proportion of urban markets with prices up 10% or higher from last year, compared to those with 30% and higher profits.

Canadian real estate prices advanced in 8 major markets

The C11 index showed small monthly growth in September, but house prices still rose – led by 8 out of 11 cities. Winnipeg (1.0%), Victoria (0.6%), Toronto (0.4%), Quebec City (0.4%), Halifax (0.4%), Hamilton (0.3%), Edmonton (0.3%) and Calgary (0.2%) all showed price growth. Those are all substantial growth rates, just not as great as in recent months. For example, Toronto’s monthly growth was not enough to prevent annual growth from declining.

Vancouver and Ottawa real estate falls from record high

The other three cities in the C11 were the drag on the index, falling from records set just a month earlier. Montreal fared best in this cohort – pretty much flat in September. Vancouver (-0.3%) and Ottawa (-0.4%) were not so lucky, both falling from their all-time highs in August. The slowdown is not seen as a problem, but as a normalization of price growth.

“All in all, barring a sharp rise in mortgage rates, we do not foresee a downward trend in prices in the coming months,” King said. You’re thinking about those inflation numbers now, aren’t you?

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