Numbers from Teranet-National Bank show a fifth consecutive month of decline for home prices nationwide -- arguably another blow to broker commissions.
Numbers from Teranet-National Bank show a fifth consecutive month of decline for home prices nationwide -- seen as another blow to broker commissions.
The January numbers reveal a 0.3 per cent price dip from December, climbing only 2.7 per cent compared to the previous year – the smallest annual increase since November 2009.
“The pundits will say we are going to have a crash, while others say we’re headed for a soft landing,” says Eduardo Alzamora, director of financial services, Teranet. “I believe we’re heading for that soft landing.”
Almost all of Canada’s six major centres recorded slight year-over-year increases, except for Vancouver – down 2.54 per cent from 2012.
In that last market, brokers are now feeling the effects of lower mortgage amounts and the impact on commission values. There's some concern that a cooling national market would see their compensation on individual deals decrease even as the number of originations slips.
“Vancouver is a cooling market,” Alzamora told MortgageBrokerNews.ca, “but I don’t think this will happen in Toronto. People say there is a glut of condos, but I haven’t seen a crash in that market yet.”
Toronto dipped 0.37 per cent from December, but gained an impressive 5.31 per cent compared to January 2012.
Halifax and Ottawa-Gatineau region led the way with both monthly and annual increases – the former by 1.69 and 6.61 respectively, and the latter 0.47 and 2.72 per cent.
The Teranet – National Bank measure, different from the monthly report from the Canadian Real Estate Association, also studies 12 cities. On that count, January marked the 14 consecutive month of slowing growth in prices.
“We track the sales of specific homes over time, but we do put in filters to avoid unique sales skewing the results, like a home selling for over $1 million, or being handed over for only two dollars,” says Alzamora.
The Teranet – National Bank House Price Index is estimated by tracking the observed or registered home prices over time. Properties with at least two sales are required in the calculations. Such a “sales pair” measures the increase or decrease of the property value in the period between the sales in a linear fashion.
