The new housing price index (NHPI) in Canada inched ahead 0.1% in August versus September, according to Statistics Canada. It gained back the 0.1% month-to-month decline that was recorded in the previous period.
The nominal level of the index has recovered to just about where it was prior to the recession. New home prices were at a peak in early to mid 2008. In mid-2009, they were down 4.0%, but that drop has since been reclaimed.
The August year-over-year change in the NHPI nation-wide was +2.9%. The “house only” sub-component was +4.5% and “land only” was -0.2%.
In the months ahead, the NHPI will serve as a valuable indicator of where overall housing markets are headed.
The consensus of analysts is that residential real estate is in line for a correction through the end of this year and probably most of next year.
Source: Daily Commercial News www.dcnonl.com
Alex Carrick, Chief Economist, CanaData
October 13, 2010
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