Indicator Digest - CMS Forex

Housing Prices

Prices of homes are important to understanding how the housing sector is doing.

Main Indicator: New Housing Price Index

Most Recent Release

May
12th, 2008

Actual

Forecast

Revised Form

0.2%

0.3%

N/A

For March
Provided by: Statistics Canada
Official Release: News Release

New Housing Price Index y/y: 6.1%, forecast 6.2%, pr. 6.2%

Prices for new homes rose at a monthly rate of 0.2%, from 0.3% in February, and 0.6% in January. The annual pace increased 6.1%, lower than in February. Building permits were down in March, and housing starts declined in April, perhaps signaling that the Canadian housing market may be losing some momentum as a result of tighter credit conditions. The central bank lowered rates by 50 basis points on April 22nd, its 4th cut since December. As we have seen in the US and the UK, the housing sector and financial firms associated with mortgage lending have been some of the hardest hit as a result of last summer "credit crunch" crisis. Where the Canadian housing market goes from here is an important indication of how the bank will deal with interest rates going forward, and therefore the strength of the Canadian Dollar.

From the Release:

"Year-over-year growth in new housing prices slowed for a second consecutive month in March. This deceleration continues a downward trend that started in September 2006, due mainly to the softening market in Alberta. Contractors' selling prices rose 6.1% between March 2007 and March 2008, a slightly slower pace than the 6.2% year-over-year increase posted in February 2008. Nationally, prices rose 0.2% between February and March."

Table of Past Data

	8/9	9/11	10/11	11/8	12/13	1/10	2/11	3/11	4/11	5/12

Actual	0.7% m/m	0.9%	0.4%	0.3%	0.1%	0.5%	0.1%	0.6%	0.3%	0.2%
Forecast	0.6% m/m	0.5%	0.5%	0.4%	0.3%	0.2%	0.3%	0.1%	0.4%	0.2%
Previous	1.1% m/m	0.7%	0.9%	0.4%	0.3%	0.1%	0.5%	0.1%	0.6%	0.3%
Revised From	N/A	N/A	N/A	N/A	N/A	N/A	N/A	N/A	N/A	N/A

Past Releases

April
11th, 2008

Actual

Forecast

Revised Form

0.3%

0.4%

0.6%

N/A

For February
Provided by: Statistics Canada
Official Release: News Release

From the Release:

"The increase in new housing prices in Canada slowed in February, following two consecutive months in which the rate of growth was gaining speed. This deceleration continues the downward trend that started in September 2006.

Nationally, contractors' selling prices rose 6.2% between February 2007 and February 2008, a slower pace than the year-over-year increase of 6.5% in January.

Prices rose 0.3% between January and February, resulting in a New Housing Price Index of 158.1 (1997=100)."

March
11th, 2008

Actual

Forecast

Revised Form

0.6%

0.1%

N/A

For January
Provided by: Statistics Canada

The new housing price index improved by 0.6% in January, better than expected. The USD/CAD had been falling in favor of the Loonie, until New York trading, when the pair found support near 0.9890, and it recovered. The greenback has seen overall strength today following the announcement by the Federal Reserve that it would pump $200 billion into the money markets.

"The cost of new housing accelerated for the second month in a row in January, the result of a strengthening housing market in the Atlantic and Prairie provinces.

Nationally, contractors' selling prices rose 6.5% between January 2007 and January 2008, a faster pace than the year-over-year increase of 6.2% in December. These back-to-back increases followed 16 months in which the gains in new housing prices had been decelerating.

On a monthly basis, prices rose 0.6% between December and January, resulting in a New Housing Price Index of 157.6 (1997=100)."

February
11th, 2008

Actual

Forecast

Revised Form

0.1%

0.3%

0.5%

N/A

For December
Provided by: Statistics Canada

HPI y/y: 6.2% (Dec 06-07), pr. 6.1% (Nov 06-07)

"The year-over-year growth rate in new housing prices accelerated for the first time in 16 months in December, mainly the result of strength in the housing market in the Prairie provinces.

Nationally, contractors' selling prices rose 6.2% between December 2006 and December 2007, a slightly faster pace than the year-over-year increase of 6.1% in November.

On a monthly basis, prices rose 0.1% between November and December, resulting in a New Housing Price Index of 156.7 (1997=100)."

January
10th, 2008

Actual

Forecast

Revised Form

0.5%

0.2%

0.1%

N/A

For November.
Official Release from Statistics Canada

New housing prices increased 0.5% on a monthly basis, while the year-over-year change remained at 6.1%.

December
13th, 2007

Actual

Forecast

Revised Form

0.1%

0.3%

N/A

For October.
Official Release from Statistics Canada

Growth in prices for new homes showed slowed from September, increasing 0.1%. It is the 14th straight month in which the pace of growth has either decelerated or held steady.

November
8th, 2007

Actual

Forecast

Revised Form

0.3%

0.4%

N/A

For September.

October
11th, 2007

Actual

Forecast

Revised Form

0.4%

0.5%

0.9%

N/A

For August.

The rate of growth in new housing prices slowed again in August, reports Statistics Canada. On a monthly basis, prices increased 0.4% between July and August resulting in a New Housing Price Index of 155.1 (1997=100). On the year, prices increased 6.5%, which is less than the 7.7% gain observed in July. Prices have gradually decelerated over the past 12 months.

September
11th, 2007

Actual

Forecast

Revised Form

0.9%

0.5%

0.7%

N/A

Month-over-month, Canada's new house price index rose 0.9% in July, and was up 7.7% from a year ago (prev. 7.8%). The month-over-month number was better than forecasts. Looking at the year-over-year picture, it is the 11th consecutive month of slower price gains, according to Statistics Canada. On August 2006, year-on-year prices peaked at 12.1%.

August
9th, 2007

Actual

Forecast

Revised Form

0.7% m/m

0.6% m/m

1.1% m/m

N/A

On the year to June 2007, the index grew 7.8%. House price trends were very mixed among the Provinces, but were mostly increasing.