After rising steadily by 2.8% over the previous six months, the Teranet-National Bank composite
index remained unchanged in January. This loss of momentum comes at a time when
transactions in the housing resale market declined in December and again in January due to the
uncertainty created by the threat of US tariffs (top graph). In addition, a significant number of
sellers decided to put their property up for sale in January, perhaps in anticipation of a high
season more vigorous than in recent years. This marked increase in new listings, combined with
the decline in sales, shifted real estate market conditions from ‘favourable to sellers’ to balanced
during the month (bottom graph), which could contain price growth in the coming months.
However, we believe that the impact of potential tariffs on the confidence of potential buyers will
dissipate in the coming months, provided that the repercussions on the labour market remain
limited. In addition, the recent interest rate cuts by the Bank of Canada and the increase in the
amortization period to 30 years for first-time buyers should continue to support the market in the
coming months, but persistent affordability difficulties could limit the extent of the recovery in the
most expensive markets.

February 2025