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The cost of Canadian housing could finally be tracking back up, according to the latest results from a long-running index, but the economist who prepared the report thinks it’s too early to say.

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Housing prices in March increased 0.5 per cent from February, the first monthly increase for the index in 10 months, according to the Teranet-National Bank Composite House Price Index released on April 20.

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The index tracks the average price of homes sold at least twice in 11 major metropolitan areas: Calgary, Edmonton, Vancouver, Victoria, Winnipeg, Halifax, Hamilton, Ottawa-Gatineau, Toronto, Montreal and Quebec City.

Daren King, an economist at National Bank of Canada who prepared the Teranet report, said most of the increase in March could be attributed to the traditionally strong nature of the spring real estate market, which is when the most houses are sold in Canada.

“It’s the big season (for real estate). That’s what explains most of it,” he said. “I think we will have to wait until after spring to assess if there is a pick up in the real estate market.”

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Real estate boards have been touting monthly price and sales gains as signs of a possible revival in the sector.

Earlier this month, the Aggregate Composite MLS Home Price Index rose 0.2 per cent on a month-over-month basis in March, according to a report by the Canadian Real Estate Association (CREA) on April 14. CREA said it was the first increase since February 2022.

And prices in Toronto rose by more than one per cent in March from February, the Toronto Regional Real Estate Board said when it released data on April 5. Real estate boards for Calgary and Vancouver also reported month-over-month increases in home prices.

But once adjusted for seasonality, the Teranet-National Bank index fell 0.8 per cent in March from February.

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Seasonally adjusted prices dropped in seven of the 11 cities, led by Victoria’s 4.5 per cent decline. Winnipeg dropped by 2.4 per cent, Toronto by 1.9 per cent, Edmonton by 0.9 per cent, and Hamilton, Quebec City and Ottawa-Gatineau all fell by 0.1 per cent

The cities bucking that trend include Halifax, up by 2.3 per cent, Montreal (0.5 per cent), Vancouver (0.3 per cent) and Calgary (0.1 per cent).

Spring fever aside, King said a low number of new listings could also be affecting March pricing.

“That is definitely a factor. Probably the (seasonally adjusted) decrease would be bigger than it is right now,” he said. “For the rest of the year, the price decrease will be less than we expect.”

On a yearly basis, the Teranet index fell 6.9 per cent in March from the same time last year, “slightly worse than the previous record contraction recorded during the 2008-2009 financial crisis,” Teranet-National Bank said.

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Prices fell the most in Hamilton (13.5 per cent), Toronto (12.1 per cent) and Victoria (8.7 per cent). Housing prices rose in three cities, with Calgary up 7.6 per cent, followed by Quebec City (4.1 per cent) and Edmonton (2.2 per cent).

Teranet also tracks price changes for 20 other cities not included in the index. Among those cities, the largest year-over-year price declines were recorded in Oshawa, Ont., down 19.3 per cent, Abbotsford-Mission, B.C., down 17.7 per cent, and Peterborough, Ont., down 17.2 per cent and Guelph, Ont., down 15.8 per cent.

Seven cities posted price gains, led by Trois-Rivières, Que., up 18.8 per cent, and Sherbrooke, Que., up 12.4 per cent.

“I don’t think the market will go back to more normal transactions with such high interest rates,” King said. “I think it will be a story for 2024 when we are expecting the Bank of Canada to decrease interest rates.”

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