Article content

A Canadian home price index posted the largest drop in its history Tuesday as rising borrowing rates put a damper on the country’s housing market.

Article content

The Teranet–National Bank National Composite House Price Index fell 2.4 per cent from July to August, on an unadjusted basis. It was the largest monthly decline recorded since the index started in 1999. On an adjusted basis, the index fell 2.1 per cent, month over month, also a record and the fourth decline in a row.

Article content

Home prices fell in nine of the 11 metropolitan areas included in the index with the largest declines recorded in Hamilton, Ont. (-5.4 per cent), Ottawa-Gatineau (-3.8 per cent), Halifax (-3.6 per cent) and Toronto (-3.5 per cent).

Calgary and Edmonton bucked the trend with month over month gains of 1.3% and 2.8%, respectively.

For cities not included in the index, Teranet observed the largest price declines in Saint John, N.B. (-7.8 per cent), Brantford, Ont. (-7.7 per cent), Barrie, Ont. (-6.7 per cent) and Kitchener (-6.2 per cent). Lethbridge, like its Alberta brethren, was up 2.6 per cent.

Article content

Teranet’s reading echoes early data from other housing sources.

The Canadian Real Estate Association reported last week that the national average home price dropped 3.9 per cent in August from last year to $637,673. Monthly, the national average price, heavily influenced by sales in Greater Vancouver and the Greater Toronto Area, crept up $7,702 over July.

Meanwhile, the Aggregate Composite MLS Home Price Index (HPI) edged down 1.6 per cent on a month-over-month basis in August, not a small decline historically, but smaller than those in June and July.

The Teranet-National Bank index is still higher than a year ago, up 8.9 per cent in August — “the fourth consecutive month of lower growth than the previous month.”

Article content

Price increases were recorded in all 11 cities that it tracks. Halifax home prices rose the most with a 15.4 per cent year-over-year increase, followed by Victoria with a 14.8 per cent gain and Calgary with a 13.6 per cent increase.

The 20 other cities tracked by Teranet but not included in the index also experienced price increases year over year.

The index includes the following cities: Calgary, Edmonton, Vancouver, Victoria, Winnipeg, Halifax, Hamilton, Ottawa-Gatineau, Toronto, Montreal, Quebec City.

With a file from Shantaé Campbell, Financial Post

• Email: gmvsuhanic@postmedia.com | Twitter: GSuhanic