In September, the Teranet-National Bank Composite Index continues to grow, so that house prices are now just 1.6% off their April 2022 peak, a clear improvement on the record 8.6% decline we saw in April 2023. However, with real estate activity slowing, price growth moderated compared to the previous month for the third consecutive month, with September’s 0.7% increase less than half that seen in August. Of the 31 cities covered in September, 71% experienced slower growth than the previous month, the most generalized slowdown since July 2022 and the second most widespread in the last nine years. Given the growing impact of policy rate hikes, the recent increase in longer-term bond rates and the less buoyant economic context, there is reason to believe that price declines could occur by the end of the year. However, they should remain limited thanks to the support of historical demographic growth and the persistent lack of housing supply.

Month-Over-Month

After adjusting for seasonal effects, the Teranet-National Bank Composite House Price IndexTM, which covers the country’s eleven largest CMAs, grew by 0.7% from August to September, the fifth consecutive monthly increase, but at a much slower pace than the previous month. In September, all 11 CMAs included in the index recorded increases, with the strongest growth in Halifax (+1.9%), Ottawa-Gatineau (+1.7%) and Victoria (+1.7%). Conversely, the smallest increases were in Montreal (+0.1%), Hamilton (+0.1%) and Edmonton (+0.2%). Growth was also observed in 12 of the 20 CMAs not included in the composite index for which data is available in September. The strongest monthly increases were seen in Sherbrooke (+5.2%), Lethbridge (+3.6% after a 4.0% decline the previous month) and Guelph (+2.5%). Conversely, the biggest decreases were in Sudbury (-5.8% after an increase of 7.3% the previous month), Saint John (-5.2% after an increase of 9.5% the previous month) and Moncton (-2.8% after an increase of 5.3% the previous month).

Before seasonal adjustments, however, the Teranet-National Bank Composite House Price IndexTM fell by 1.3% from August to September, the first decrease after six consecutive monthly increases.

Year-Over-Year

The Teranet-National Bank Composite Home Price IndexTM rose by 3.0% from September 2022 to September 2023. Increases were observed in 6 of the 11 cities making up the composite index in September. Halifax and Calgary led the way with year-over-year price increases of 6.0%, followed by Vancouver with a 5.8% gain and Victoria with a 4.4% growth. As for the lagging markets, prices fell most sharply in Winnipeg (-1.2%), Hamilton (-1.0%) and Montreal (-0.8%). As for the other 20 CMAs not included in the composite index, annual gains were observed in 14 of them. The strongest growth was recorded in Saint John (+14.0%) and Sherbrooke (+11.1%), while the steepest declines were in Belleville (-2.7%) and Barrie (-2.7%).

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Teranet-National Bank House Price Index Growth Moderates in September

Canada : Home Price Rises Moderate in September