Reports

The Teranet-National Bank Composite Index declined for the sixth consecutive month in May, with home prices falling 1.0% on a month-over-month basis. This cumulative decline amounts to 4.0% over the past six months and 4.3% over the past year. The continued decline in prices in May comes amid a context where transaction volumes in the resale market remain depressed relative to their historical average. That said, home sales in the resale market have rebounded over the past two months, a recovery that could continue in the coming months thanks to the recent improvement in consumer confidence and the labour market. Real estate market conditions have also tightened in several regions, although they remain relatively loose for now in Toronto and Vancouver. We therefore expect these markets to gradually stabilize over the coming months and may even see price increases by the end of the year. It turns out that prices in real terms have experienced significant corrections from their 2022 peaks in these two major markets, leading to a notable improvement in affordability. This improvement in accessibility, which has been pronounced over the past year, could be one of the factors behind the recent rebound in transactions in the resale market. However, several factors could limit the extent of this recovery and constrain price growth, including demographic decline, fixed mortgage rates that remain high and have risen sharply since February, and uncertainty surrounding the renewal of the USMCA.

June 2026

The Teranet-National Bank Composite Index fell for the fifth consecutive month in April, with property prices declining by 0.7% on a month-over-month basis. This brought the cumulative price decline to 3.0% over the past five months and 4.5% over the past year. However, the price decline in April was less pronounced than the 1.0% drop recorded in March, as the resale housing market saw its first increase in transactions in six months. Nevertheless, sales levels remain particularly low, with the ratio of transactions per household nationwide still 25% below its historical average. Affordability challenges also continue to weigh on property prices, as evidenced by the fact that the largest declines over the past year were recorded in the country’s least affordable markets, while the strongest increases were observed in the most affordable cities. Despite the recent uptick in transactions in the resale market, it is still too early to speak of a sustained recovery for the housing market. Indeed, several factors continue to weigh on the residential sector, including demographic decline, a weak labour market since the start of the year, and trade and geopolitical uncertainty. The conflict in the Middle East has indeed had repercussions on the Canadian housing market, with mortgage rates rising over the past two months as bond yields climbed due to rising inflation. In this context, we expect prices to continue to decline in the coming months, primarily due to particularly loose market conditions in Ontario and British Columbia.

April 2026

The Teranet-National Bank Composite Index continued to decline in March for the fourth consecutive month, and the decline even accelerated, with property prices falling by 1.0% between February and March, compared with a 0.6% drop the previous month. As a result, prices have fallen by 2.3% over the past four months and by 5.0% year-over-year. Furthermore, 55% of all markets tracked by our price indices in March were down 10% or more from their peak. Although this proportion is lower than what was recorded in 2022, it remains very high by historical standards, especially given the current environment of more accommodative interest rates. The continued price decline in March comes as the number of transactions in the resale market remains particularly low, despite stabilization in sales during the month. In fact, the ratio of transactions per household nationwide was 26% below its historical average. It is also worth noting that the price decline over the past year was nearly as significant for condos (-5.6%) as it was for single-family homes (-4.9%), illustrating the widespread weakness of the Canadian residential market. There is no doubt that several factors continue to weigh on the real estate sector, including demographic decline, the weak labour market since the start of the year, and trade uncertainty—to which geopolitical uncertainty has now been added. The conflict in the Middle East has even had repercussions on the Canadian real estate market, with mortgage rates rising in March as bond yields climbed due to higher inflation anticipated by the markets. Against this backdrop, we expect prices to continue their downward trend in the coming months, assuming there is no positive turnaround in trade tensions with the United States.

April 2026

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

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