It was only the third time in 13 years that home prices dropped in September. The other two instances occurred in 2008, as Canada was entering recession, and during the correction of 2010.
The 2012 September prices were down from August in six of the 11 markets that the index studies, led by Victoria, BC (−1.3 per cent) and Vancouver, BC (−1.2 per cent). In the rising prices department, from August to September, you had Calgary and Halifax (both by 0.5 per cent), Winnipeg (0.4 per cent), Hamilton (0.3 per cent) and Toronto (0.1 per cent).
Here’s a broader look at last month’s gains and declines in each of the metropolitan areas measured:
- Calgary 0.5 %
- Halifax 0.5 %
- Winnipeg 0.4 %
- Hamilton 0.3 %
- Toronto 0.1 %
- Quebec -0.2 %
- Montreal -0.6 %
- Edmonton -0.7 %
- Ottawa -0.8 %
- Vancouver -1.2 %
- Victoria -1.3 %
This Teranet chart also breaks down the annual numbers and national picture:
Last week, our Finance Minister Jim Flaherty said that Canada has done enough to slow its housing market and prevent a crash like that seen in the United States or Spain, Finance Minister said on Saturday. Speaking on CBC Radio, Flaherty said he had no plans to take further action to take froth out of the housing market, after a series of moves to tighten conditions for mortgage lending. The most recent change was in July.
“We’ve done enough, I do not intend to do any more,” Flaherty said, adding that he was pleased at signs of a slowdown in key sectors of the market, like the condo market in the big cities of Toronto and Vancouver.
Canada’s housing prices fell during the global recession, but the market bounced back stronger than before, with bidding wars for properties in many cities. The higher prices prompted fears that buyers were taking on too much debt, and that the market could be heading for a hard landing.
But the market has cooled abruptly since the last round of changes to mortgage rules, easing fears that debt levels would just continue to grow.
Figures released earlier this week show that sales of existing homes were 15.1% below year-ago levels in September, while the 3.9% rise in the home price index of the Canadian Real Estate Association was the smallest gain since May 2011.