News and Economic Reports

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

After contracting for the previous seven months, the Teranet- National Bank composite index put an
end to this downward sequence with an increase of 0.4% in August. This growth comes against a
backdrop in which the number of transactions on the resale market continued to rise for a fifth
consecutive month in August (top chart). In particular, the very soft market conditions observed in
Ontario tightened somewhat with the recent pick-up in transactions, allowing prices to rise during the
month in Toronto, Hamilton and Ottawa-Gatineau. Despite this growth in August, the composite
index still remains 4.6% below its December level, with declines over this period of 7.9% in Toronto,
7.4% in Hamilton and 1.5% in Ottawa-Gatineau. Market conditions also eased significantly in British
Columbia, with Vancouver and Victoria posting declines of 7.1% and 0.4% respectively. 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
(bottom chart). Although the composite index returned to growth in August, it is still too early to say
whether this trend will continue in the months ahead, despite the expected cuts in the Bank of
Canada’s policy rate. Continuing uncertainty, moderating population growth, the risk of persistently
high long-term interest rates, and a potentially further deterioration in the labour market will continue
to weigh on the housing market.

September 2025

The Teranet-National Bank composite index fell by 0.8% from June to July, the sixth consecutive monthly decline. As a result, prices have fallen by 5.0% since January. This comes against a backdrop where the resale market continues to be particularly weak, due in particular to the uncertainty surrounding the trade war with the United States. Although the number of transactions on the resale market has risen over the past four months, market conditions across the country have eased considerably and now indicate a balanced market after being tighter than average. However, this turnaround is mainly due to market conditions now strongly in favour of buyers in Ontario and British Columbia, which is having the effect of driving prices down, particularly in these two provinces with their persistent affordability challenges. As a result, prices are down on an annual basis by 6.7% in Toronto and 4.1% in Vancouver, highlighting the amplifying effect of affordability conditions in the current weak environment. Conversely, Quebec stands out, with Montreal and Quebec City experiencing the highest price increases among the eleven cities included in the composite index, but also with the strongest increases in other cities not included in the composite index, with double-digit annual growth in Trois-Rivières and Sherbrooke. Against a backdrop of persistent economic uncertainty, moderating population growth and the risk of long-term interest rates remaining high, home prices are likely to remain under pressure over the coming months, even if the resale market may regain some strength. Indeed, the backlog of properties for sale will continue to weigh on prices over the coming months.

August 2025

The Teranet-National Bank composite index fell 0.5% from May to June, marking the fifth consecutive monthly decline. As a result, prices have fallen 4.3% since January. This comes at a time when the resale market continues to be particularly weak, due in large part to the uncertainty surrounding the trade war with the United States. Although the number of transactions in the resale market has increased slightly over the past three months, market conditions have eased considerably across the country and now indicate a balanced market after being tighter than average. However, this reversal is mainly due to market conditions that are now 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, 75% of markets (15 out of 20) in Ontario and British Columbia recorded a decline during the month, compared to 36% in other provinces (4 out of 11). As a result, prices are down 6.7% year-over-year in Toronto and 4.1% in Vancouver, highlighting the amplifying effect of affordability conditions in the current weak environment. 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.

July 2025

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

The Teranet-National Bank composite index fell 1.5% from March to April, marking the fourth consecutive monthly decline and a sharper contraction than in previous months. This comes at a time when the resale market continues to be particularly weak, due in large part to the uncertainty surrounding the trade war with the United States. As a result, prices have declined by 2.4% since December 2024, with a more pronounced decline for condominiums (-2.7%) and a slightly less pronounced decline for other types of housing (-2.1%). It should be noted that 68% of the markets monitored (21 out of 31) were down during the month, a higher number than the 61% observed in March, while the proportion of CMAs outside Ontario jumped in April (40% to 67%). Conversely, the number of markets in decline in Ontario was lower than in the previous month (81% to 69%) but remained high. It should be noted that the weakness in Ontario’s real estate market remains significant, with 75% of the markets covered experiencing a decline of 10% or more from their all-time highs, compared to only 27% elsewhere in the country. In addition, challenges are intensifying in the province’s three largest cities, all of which experienced monthly declines in April that were twice as large as those seen in March (Toronto: -1.3% to -2.7%, Hamilton: -0.8% to -3.9%, Ottawa-Gatineau: -0.5% to -1.0%). In the context of ongoing economic uncertainty, moderate population growth and the risk that long-term interest rates will remain higher for longer than expected, home prices are likely to remain under pressure in the coming months.

May 2025

The Teranet-National Bank composite index fell 0.4% from February to March, marking a third consecutive monthly decline and a sharper contraction than in previous months. This comes at a time when the resale market continues to slow, due in particular to uncertainty surrounding the trade war with the United States. As a result, prices have declined by 0.7% since December 2024, with a more pronounced decline for condominiums (-1.2%) and a slightly less significant decline for other types of housing (-0.3%). Although the real estate market has slowed in all provinces, the magnitude of this decline in activity is particularly noticeable in Ontario and, to a lesser extent, in British Columbia, the two least affordable markets in the country. Furthermore, the weakness in the Ontario housing market is not limited to a few markets, but is a broader issue, as 81% of the CMAs in this province (13 out of 16) covered by our price indices experienced declines from February to March, compared to only 40% for other markets outside Ontario. It should also be noted that more affordable real estate markets are faring better. This is particularly true in Quebec, where the four CMAs covered by our indices are among the top five in the country in terms of annual price growth (Sudbury completing the list), with increases ranging from 9.7% in Montreal to 18.3% in Trois-Rivières compared to March 2024. In a context of ongoing economic uncertainty, moderate population growth and the risk that long-term interest rates will remain higher for longer than expected, home prices are likely to remain under pressure in the coming months.

April 2025