After a cumulative contraction of 4.1% over the previous seven months, the Teranet–National Bank Composite Index finally stabilized in July. This stabilization comes as transactions on the resale market continued to recover for a fourth consecutive month. While sales remained below their historical average, broadly balanced market conditions at the national level helped support prices, particularly in Vancouver (+0.7%) and Toronto (0.0%), where resale market conditions strengthened. The Toronto market saw a recent rebound in sales that helped prices stabilize for a second consecutive month in July, following declines in 15 of the previous 17 months. This is particularly important for the composite index, as Toronto and Vancouver alone account for 61.1% of the composite index (Toronto: 40.3%; Vancouver: 20.8%).
Nationally, the recent rebound in transactions has likely been supported by the strong labour market performance in recent months as well as improved affordability in recent quarters. The drop in prices observed in the majority of the country’s major cities may also have encouraged some buyers to return to the market. If the recovery in sales continues, it could eventually bring price growth back into positive territory. However, several factors are expected to limit the magnitude of the increase, including ongoing trade uncertainty, persistently high fixed mortgage rates and slower population growth.