Canada’s housing prices flatline in March—for the first time in 15 years

Spring has sprung, but the housing market is stuck in hibernation

Chart showing the Teranet-National Bank House Price Index for selected cities since 2008

If you’re bearish on real estate—as we at Canadian Business have been for some time—the results of the latest Teranet-National Bank House Price Index, released today, may give you some grim satisfaction. For March 2014, the national house price index was flat—which doesn’t sound particularly alarming, until the authors point out that this is the first time in 15 years that house prices haven’t increased in March, typically the kickoff of the important spring buying season.

From the Teranet–National Bank press release:

In March the Teranet-National Bank National Composite House Price Index was essentially unchanged from the previous month. Except for the recession year 2009, this is the first time in 15 years of index data collection that home prices for Canada as a whole have failed to advance in March. However, the story varied widely from east to west.

As the chart above shows, house prices in Western Canada are still continuing their upward trajectory. But look at Ontario and Quebec and things look less rosy. In Hamilton, Toronto, Ottawa and Montreal, March prices stayed flat month over month or declined. This marks the seventh straight month of price deflation for Ottawa, while Montreal prices have declined in six of the last eight months.

The Teranet–National Bank release comes just days after a somewhat more upbeat report from Royal LePage, which posited that lousy weather has kept buyers inside in the first quarter of the year. The buyers may just be in hibernation, of course, ready to pounce as soon as the weather gets better, but this latest set of numbers suggests the market could remain groggy for some time.