After seasonal adjustment, the Teranet-National Bank composite HPI remained essentially unchanged from March to April, recording a slight decline of 0.1% after a drop of 0.8% the previous month. This stabilization coincides with a resurgence of activity in the property resale market. A record cumulative drop of 8.7% from its spring 2022 peak was recorded during this downturn caused by extremely aggressive monetary tightening. In the coming months, it is highly likely that the composite index will return to short-term growth, supported by the renewed vigor of home sales in a context where supply remains low on a historical basis. This revival of the real estate sector is partly explained by the stabilization of interest rates. Indeed, now that the Bank of Canada has stopped raising its key rate in recent months, some buyers probably perceive less uncertainty and are taking action. A second factor explaining this increase is the strong demographic growth we are experiencing in the country, especially in large urban centers that attract newcomers. It remains to be seen whether this strength in the real estate market will be temporary in a context where interest rates are still high, lending conditions are tightening, and the labour market is not immune to a downturn.

Month-Over-Month

Before seasonal adjustments, the Teranet-National Bank™ Composite House Price Index, which covers eleven CMAs across the country, rose by 1.8% from March to April, a second consecutive monthly increase.

However, after adjusting for seasonal effects, the Teranet-National Bank™ Composite House Price Index remained relatively stable with a slight decrease of 0.1% between March and April, following a 0.8% decline the previous month. In April, 5 of the 11 CMAs included in the index experienced contractions: Edmonton (-2.5%), Ottawa-Gatineau (-2.1%), Vancouver (-0.9%), Hamilton (-0.5%) and Montreal (-0.2%). Conversely, prices increased during the month in Quebec City (+1.2%), Toronto (+0.7%), Winnipeg (+0.5%), Calgary (+0.3%) and Victoria (+0.1%), while they remained stable in Halifax. For the remaining CMAs not included in the composite index, a decrease was observed in 12 of the 20 CMAs for which data is available in April. The largest monthly decreases were in Thunder Bay (-12.8% after a 17.9% increase the previous month) and Kingston (-11.1%). Conversely, notable increases were observed in Moncton (+5.9%) and Peterborough (+4.5%).

Year-Over-Year

The Teranet-National Bank™ Composite Home Price Index fell 8.5% from April 2022 to April 2023, a record annual contraction. Increases were still seen in 2 of the 11 cities in the composite index in April. Calgary led the way with a 6.9% year-over-year price increase, followed by Quebec City with a 2.7% gain. As for the lagging markets, prices fell the most in Hamilton (-14.8%), Toronto (-12.2%) and Ottawa-Gatineau (-9.7%). As for the 20 other CMAs not included in the composite index, positive annual gains were observed in 5 of them. The strongest growth was recorded in Trois-Rivières (+14.3%) and Sherbrooke (+8.4%), while the largest declines were in Abbotsford-Mission (-22.0%), Guelph (-18.4%) and London (-17.7%).

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Teranet-National Bank House Price Index : Housing Prices Stabilize in April