Teranet–National Bank House Price Index™

After stabilizing in December, the Teranet-National Bank composite index fell for the first time in six months, with prices declining 0.4% from December to January. This contraction comes at a time when the number of transactions in the resale market declined for the third consecutive month in January (top chart), despite the Bank of Canada’s key interest rate cuts in the fall and the improvement in the labour market in recent months. On an annual basis, the composite index fell 4.0% compared to January 2025, a larger contraction than the 3.5% recorded the previous month. However, the decline in prices was not observed across the country. In fact, improved affordability, due to more favourable fixed and variable interest rates and resilient household incomes, supported price growth in some regions. This was particularly the case in Quebec and the Prairies, which are more affordable than the national average and experienced the highest annual price growth. Conversely, persistent affordability challenges in Ontario and British Columbia continue to weigh on prices in an increasingly unfavourable demographic context (bottom chart). Although a moderate recovery in resale market activity is anticipated in 2026, continued market weakness in Ontario and British Columbia is expected to limit short-term price increases at the national level. Recent cuts in the Bank of Canada’s policy rates have provided some relief, but 5-year mortgage rates could start to rise again in 2026 if our scenario of economic improvement materializes. Combined with population growth that is expected to moderate further, these factors could continue to weigh on the outlook for the residential market.

February 2026