Home prices in Vancouver dropped for the second month in a row, declining by 1.3% month-over-month in November, according to the
Teranet-National Bank Composite House Price Index.
The two months of dips follow 21 consecutive months of price increases.
“…it really does look like Vancouver’s housing bubble has burst,” wrote David Madani, senior Canada economist at Capital Economics in a note.
In year-over-year terms, prices are still up by 19.3%, according to Wednesday’s data. However, at the same time, home sales have dropped by 43%, which will likely put some downwards pressure on prices going forward, according to data cited by Madani.
Meanwhile, the overall annual house price inflation in Canada rose to 11.9% last month, up from 11.8% in the previous one.
This was at least in part due to Toronto, which saw home prices rise for the tenth straight month by 1.1% month-0ver-month, and by 18.5% year-over-year.
“Overall, the rate of national house price inflation will remain high in the near term, but only because of the speculative craze that is bolstering sales in Toronto’s hot housing market,” he argued in a note. “But even that boom might not last, especially if mortgage rates rise in step with a further surge in sovereign bond yields.”
The Canadian dollar is little changed at 1.3134 per US dollar as of 12:13 p.m. ET.