Reports

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

After rising over the previous four months, the Teranet-National Bank composite index lost momentum in December, with prices remaining unchanged compared to November. This loss of steam comes at a time when the number of transactions in the resale market declined in November and December, despite the Bank of Canada’s policy rate cuts in the fall and the improvement in the labour market in the last months of the year. On an annual basis, the composite index fell 3.5% compared to December 2024, a larger contraction than the 2.8% recorded the previous month. However, the decline in prices was not observed everywhere in 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 true 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. Although a moderate recovery in resale market activity is anticipated in 2026, persistent 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 key interest 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.

January 2026

The Teranet-National Bank composite index continued to rise in November, posting a fourth consecutive monthly increase, up 0.4%, after a period of contraction during the first seven months of the year. This increase comes as the number of transactions in the resale market has risen in recent months as uncertainty surrounding the trade dispute with the United States has eased. In addition, improved affordability, due to more favourable fixed and variable interest rates and resilient household incomes, has supported price growth in some regions. This is particularly true in Quebec markets, which are more affordable than the national average and have experienced the highest annual price growth. Conversely, persistent affordability challenges in Toronto, Hamilton, and Vancouver continue to weigh on prices in an increasingly unfavorable demographic context. Although the composite index maintained its upward trend in November, continued market weakness in Ontario and British Columbia is expected to limit price increases at the national level in the short term. Recent cuts to 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.

December 2025

The Teranet-National Bank Composite Index continued to improve in October, posting an increase for a third consecutive month, registering at +0.4%, following a period of price contraction from January to July. This rise comes as the number of transactions in the resale market has increased in recent months despite ongoing uncertainty surrounding the trade dispute with the United States. While the increase in prices in October was more significant for certain markets, the diffusion was the best seen this year as a large majority of markets registered an increase. The only declines were registered in Montreal and Halifax, the former which edged down following a surge of 2.5% in the prior month and the latter which essentially reversed its previous performance (-1.2% after +1.0%). It should be noted, however, that despite the slight increase in prices over the past three months, the composite index is still down 3.9% in 2025, with significant declines in Toronto (-7.9%), Vancouver (-6.2%), and Hamilton (-5.6%).

Although the composite index maintained its upward trend in October, soft market conditions in Ontario and British Columbia are expected to constrain price increases in the near term, even with some relief from recent Bank of Canada policy rate cuts. While 5-year mortgage interest rates have edged down, they appear to be stabilizing and could be nearing a bottom. Combined with moderating population growth and a labour market that remains vulnerable, these factors could continue to weigh on the residential market outlook.

November 2025

The Teranet-National Bank Composite Index continued to rise in September, posting a modest increase of 0.2% for the second consecutive month, following a period of price contraction from January to July. This growth comes as the number of transactions in the resale market has increased in recent months, against a backdrop of improved consumer confidence, despite ongoing uncertainty surrounding the trade dispute with the United States. While the increase in prices in the previous month was due to a rebound in Ontario markets, where particularly soft market conditions have tightened recently, the increase in September was driven by significant gains in Montreal and Quebec City, two markets where resale activity remains very high. It should be noted, however, that despite the slight increase in prices over the past two months, the composite index is still down 2.6% from September 2024, with significant declines in Toronto (-6.9%) and Vancouver (-5.0%), as well as Victoria (-0.7%) and Hamilton (-2.7%) to a lesser extent. Against the backdrop of the current trade dispute, market resilience has depended on differing levels of affordability. Indeed, the markets with the highest affordability challenges saw the sharpest declines, as the financial risk of such a large real estate transaction was amplified by economic uncertainty. While the composite index maintained its upward trend in September, market conditions, which remain soft in Ontario and British Columbia, are expected to limit price growth in the coming months, despite support from Bank of Canada policy rate cuts. Although prices may continue to rise in the coming months, the persistent climate of uncertainty, moderating population growth, the risk of long-term interest rates remaining high, and the ongoing deterioration of the labour market are all factors that will continue to weigh on the residential market.

October 2025