The Teranet-National Bank Composite Index continued to decline in February, falling 0.5% on a month-over-month basis. As a result, prices have decreased by 1.1% over the past three months. This decline comes at a time when the number of transactions in the resale market fell for a fourth consecutive month in February, despite the Bank of Canada’s policy rate cuts last fall. On an annual basis, the composite index fell by 4.4% compared to February 2025, a sharper decline than the 4.0% drop recorded the previous month. However, the price decline was not observed across the entire country. In fact, improved affordability due to more favourable fixed and variable interest rates, coupled with resilient household incomes, supported price growth in certain regions. This is particularly true of the Quebec and Prairie markets, 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. Although a moderate recovery in resale market activity remains possible in 2026, the persistent weakness of the market in Ontario and British Columbia is expected to limit short-term price increases at the national level. Recent cuts to the Bank of Canada’s key interest rates have provided some relief, but fixed mortgage rates could begin to rise again in 2026 due to inflationary pressures stemming from the conflict in the Middle East. Combined with population growth that is expected to moderate even further, these factors could continue to weigh on the residential market outlook.

March 2026