News and Economic 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

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