A major Canadian housing price index flattened out in August, with one economist writing that the market is weaker than some industry watchers might believe.

The Teranet-National Bank Composite Price Index rose 0.2% in August, following a 0.8% rise in July. But, when adjusted on a seasonal basis, the index was flat, after drops in June and July.

“The published composite index rose in August for the fifth month in a row, but these rises only reflect usual seasonal patterns over this time of year,” writes National Bank senior economist Marc Pinsonneault, in a note. “Indeed, after seasonal adjustment the composite index was actually flat in August.”

That means that at a national level the market is “certainly not displaying underlying strength,” he writes, adding that the index is heavily skewed by Toronto and Vancouver, Canada’s largest (and hottest) housing markets.

“This is mostly a reflection of Toronto and Vancouver, the two most important real estate markets in Canada,” writes Pinsonneault. “The published index for Toronto showed a fifth monthly increase in a row, but its seasonally adjusted counterpart displayed the opposite with five consecutive declines.”

The adjusted index also declined over the last three months in Vancouver, reflecting a general flattening of prices.

But it’s not bad news across the board. Pinsonneault is quick to note that both the Ottawa and Montreal housing markets continued to perform well last month.

“There are areas displaying underlying strength, such as Montreal and Ottawa-Gatineau, whose indexes recorded a string of unusually large increases over the past few months,” he writes.

Weak Canadian Home Price Growth Trend “Did Not Turn Around” in August by Sarah Niedoba | Livabl