The Teranet-National Bank composite index fell 1.6% from April to May, marking the fifth consecutive monthly decline and a sharper contraction than in previous months. As a result, prices have fallen by 3.9% since December 2024. May also marks an important turning point, with the composite index falling into negative territory for the first time in 22 months, down 1.6% year-over-year from May 2024. This comes as the resale market continues to be particularly weak, due in part to uncertainty surrounding the trade war with the United States. Although the number of transactions in the resale market has increased slightly in the last two months, market conditions have eased considerably across the country and now point to a balanced market. However, this reversal is mainly due to market conditions that are strongly favourable to buyers in Ontario and British Columbia, which is causing prices to decline, particularly in these two provinces with persistent affordability challenges. In fact, 90% of markets (18 out of 20) in Ontario and British Columbia recorded declines during the month, compared to 27% in other provinces (3 out of 11). Amid ongoing economic uncertainty, moderate population growth and the risk of continued high long-term interest rates, home prices are expected to remain under pressure in the coming months, even if the resale market regains some momentum. The accumulation of homes for sale will continue to weigh on prices in the coming months.

June 2025