Canada’s largest land registry operator saw Canadian real estate prices moving higher. The Teranet–National Bank of Canada House Price Index (HPI) shows prices increased in March. Analysts from the creator of the index warned the pandemic is likely to have an abrupt shift soon. As the lockdown carries on, they expect the index to cool in almost every market – especially those in Eastern Canada.

The Index Is Expected To Cool Over The Next Few Months

It’s really important to know how the HPI differs frrom board data to understand this month’s numbers. The HPI is one of the most accurate sources of data, because it only counts completed sales. This differs from real estate boards, which count sales as soon as they are unconditional. Boards consequently have the freshest information, but it’s also subject to revisions. The HPI has more accurate information at reporting, but it’s subject to some lag, since it only includes completed sales.

During most periods, the difference between the two would be mostly minimal. However, during periods of volatility, both will have their issue. Boards may include sales that never actually close, revising numbers lower. The HPI will lag, not reflecting a rapid deterioration as was observed late last month. Neither are better or worse, but those are important details to keep in mind over the next few months.

With that in mind, Teranet-National Bank of Canada analysts left some important notes. Home prices were gaining momentum in March, but that is based on registry data. Since registry data lags, the index should reflect the cold water poured on sales. Analysts believe “the loss to be more prevalent in the metropolitan markets located in Central and Eastern Canada (Toronto, Hamilton, Ottawa-Gatineau, Montreal and Halifax) which so far have pulled the national HPI up.”

Canada’s Largest Real Estate Markets Made Big Gains In March

The C11, an index including Canada’s 11 largest real estate markets, made a big advance last month. The price index climbed 0.62% in March, and is now up 3.84% from the same month last year. The firm notes the monthly increase was double the average seen over the past 10 years.