After rising for the past five months, the Teranet-National Bank Composite Index™ started to fall again in October, as property prices across the country declined by 0.4% over the month in a context where the resale market is losing momentum. Indeed, the rise in interest rates in recent months, which exacerbates affordability problems, combined with a less buoyant job market, have contributed to the slowdown in the real estate market. Indeed, market conditions have eased across the country, so that the number of months of inventory rose to 4.1 in October, a level similar to that prevailing before the pandemic, but still lower for the moment than the historical norm. What’s more, the weakness of prices in October was widespread across the country, with 58% of the 31 cities covered experiencing a sharper fall or weaker growth than the previous month. In the months ahead, prices are likely to continue to decline, while interest rates remain high and the economic context will be less favourable, representing headwinds for the sector despite the support of historical demographic growth.

Month-Over-Month

After adjusting for seasonal effects, the Teranet-National Bank Composite House Price Index™, which covers the country’s eleven largest CMAs, declined by 0.4% from September to October, the first decrease following five consecutive monthly increases. In October, four of the 11 CMAs included in the index experienced decreases: Toronto (-1.6%), Edmonton (-1.2%), Vancouver (-1.1%) and Ottawa-Gatineau (-1.1%). Conversely, notable increases were recorded in Montreal (+3.7%), Halifax (+1.1%) and Winnipeg (+1.0%). On the other hand, decreases were observed in 11 of the 20 CMAs not included in the composite index for which data are available in October. The biggest monthly decreases were seen in Saint John (-5.3%), Trois-Rivières (-3.3%) and London (-2.5%). Conversely, the biggest increases were in Moncton (+4.6% after a 2.3% drop the previous month), Kingston (+3.8%) and Peterborough (+2.6%).

Before seasonal adjustments, the Teranet-National Bank Composite House Price Index™ fell by 1.0% from September to October, the second consecutive monthly decline.

Year-Over-Year

The Teranet-National Bank Composite Home Price Index™ rose by 2.8% from October 2022 to October 2023. Increases were observed in 9 of the 11 cities making up the composite index in October. Halifax led the way with a 12.5% year-on-year price increase, followed by Victoria with a 6.5% gain and Quebec City with 6.3% growth. As for lagging markets, prices fell in Edmonton (-3.6%) and Ottawa-Gatineau (-0.5%). As for the other 20 CMAs not included in the composite index, annual gains were observed in 16 of them. The strongest growth was recorded in Moncton (+13.0%) and Sherbrooke (+9.4%), while the steepest declines were in London (-2.1%) and Barrie (-0.9%).

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Teranet-National Bank House Price Index Down in October

Canada : Home Prices Start to Drop Again in October