With renewed activity in the residential real estate market in recent months, the seasonally adjusted Teranet-National Bank composite index rose by 1.6% from July to August, the fourth consecutive monthly increase. As a result, the composite index is now just 2.1% below its all-time peak of April 2022, following a record cumulative decline of 8.6% over one year. The widespread nature of August’s rise is also noteworthy, as this is the first time since March 2021 that monthly increases have been observed in all the CMAs included in the composite index. However, there is reason to believe that this strength is likely to be short-lived, given the slowdown observed in the resale market over the last two months in connection with the renewal of the Bank of Canada’s monetary tightening cycle. Although price declines are expected in the coming months due to the growing impact of interest rates and the less favourable economic context, property price decreases should remain limited thanks to the support of historical demographic growth and the persistent lack of housing supply.

Month-Over-Month

Before seasonal adjustments, the Teranet-National Bank Composite House Price IndexTM, which covers the country’s eleven largest CMAs, rose by 0.6% from July to August, the sixth consecutive monthly increase.

After adjusting for seasonal effects, the Teranet-National Bank Composite House Price IndexTM grew by 1.6% from July to August, the fourth consecutive monthly increase, but slower than the previous month. In August, all 11 CMAs included in the index recorded increases, with the strongest growth in Calgary (+3.5%), Vancouver (+2.8%) and Hamilton (+2.4%). Conversely, the smallest increases were in Victoria (+0.2%), Montreal (+0.7%) and Winnipeg (+0.7%). Growth was also observed in 17 of the 20 CMAs not included in the composite index for which data is available in August. The strongest monthly increases were seen in Saint John (+11.2%), Sudbury (+6.5%) and Moncton (+5.2%). Conversely, decreases were recorded in Lethbridge (-4.1%), Barrie (-0.6%) and Belleville (-0.6%).

Year-Over-Year

The Teranet-National Bank Composite Home Price IndexTM rose by 1.1% from August 2022 to August 2023, the first annual increase in nine months. Gains were observed in 5 of the 11 cities making up the composite index in August. Calgary led the way with a 6.2% year-on-year price increase, followed by Halifax with a 5.1% gain and Quebec City with a 3.6% growth. As for lagging markets, prices fell most sharply in Winnipeg (-3.6%), Ottawa-Gatineau (-2.3%), Hamilton (-1.7%) and Montreal (-1.7%). As for the other 20 CMAs not included in the composite index, annual gains were observed in 9 of them. The strongest increases were recorded in Saint John (+20.6%) and Trois-Rivières (+10.2%), while the steepest declines were in Belleville (-4.6%) and St. Catharines (-4.4%).

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Teranet-National Bank House Price Index Sees Another Solid Rise in August

Canada : Housing Prices Set to Moderate in Coming Months