Brady Layton, BComm, CFP

CALGARY — Calgary home prices rose slightly in August, according to the latest Teranet-National Bank National Composite House Price Index, which tracks repeat home sales in the country.

Prices in Calgary were up 0.4 per cent from the previous month and 0.8 per cent year-over-year, said the report released on Wednesday. Nationally, prices rose 0.2 per cent on a monthly basis and by 4.1 per cent on an annual basis.

The index is estimated by tracking observed or registered home prices over time using data collected from public land registries. All dwellings that have been sold at least twice are considered in the calculation of the index.

This year’s August increase of just 0.2 per cent nationally was the smallest August increase in 12 years and in three of the 11 metropolitan markets surveyed, prices were down from the month before: Vancouver (1.2 per cent), Victoria (0.7 per cent) and Quebec City (0.6 per cent).

“Since monthly changes are subject to seasonal factors, the 12-month change is revealing. In August the composite index was up 4.1 per cent from a year earlier, for a ninth consecutive month of deceleration in 12-month inflation,” said the report. “However, the only market in which 12-month inflation has followed the national composite in decelerating for nine straight months is Vancouver.”

Prices were down from a year earlier in Vancouver by 0.3 per cent.

“The decade-long run-up in home prices, which has seen prices rise in some cities by over 150 per cent, is now going into reverse, with national home prices falling in August for the first time in more than two years,” said David Madani, Canada Economist for Capital Economics. “While prices might tread water for a few more months, the slump in home sales suggests that there is little chance of the ‘soft landing’ predicted by others. We expect house prices to decline by 25 per cent over the next few years.”

He said “a potentially severe housing correction has already begun in Vancouver, Canada’s most extremely overvalued housing market.

“Although housing valuations are not quite as rich elsewhere in the country, most regions have seen prices rise too sharply over the past decade and presumably we can expect to see corrections in these markets too. This includes Calgary, Edmonton, Winnipeg, Toronto, Ottawa, Montreal and Halifax,” said Madani.”Canada’s housing market has been booming for several years but, like all housing bubbles, they never last. The support rising housing valuations has provided to household spending in the past is now likely to work out in reverse over the next few years.”

mtoneguzzi@calgaryherald.com

© Copyright (c) The Calgary Herald

Read more: http://www.calgaryherald.com/homes/Calgary+home+prices+edge+upward/7265635/story.html#ixzz26w9zgGiQ