The Teranet-National Bank Composite Index™ continued its correction for a second consecutive month in November, with prices down 0.5% compared to October in a context where the resale market continues to lose momentum. Indeed, persistent affordability issues (despite the recent drop in long-term fixed mortgage rates), combined with a less buoyant job market, have contributed to the slowdown in the real estate market. This less favourable economic backdrop has certainly undermined consumer confidence, with consumers more pessimistic about the real estate market than at any time in the past 20 years. Indeed, the net proportion of consumers believing that now is a good time to make a major purchase (such as a property or car) is even lower than at the worst of the pandemic. Over the coming months, prices will continue to fall, despite the support of historical demographic growth and the shortage of housing supply. We expect the composite index to reach its trough set at the beginning of the year again by spring 2024, with a cumulative decline of 8% from its April 2022 peak. However, if the moderation in the job market remains limited and overnight rate cuts actually take place in early 2024, the coming spring could represent a good window of opportunity for some buyers and help stabilize prices.

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 0.5% from October to November, the second consecutive monthly decrease. In November, five of the 11 CMAs included in the index experienced decreases: Montreal (-2.2% after a 3.7% rise the previous month), Hamilton (-2.1%), Winnipeg (-1.2%), Toronto (-1.0%) and Halifax (-0.9%). Conversely, increases were recorded in Ottawa-Gatineau (+2.8%), Edmonton (+1.2%), Quebec City (+1.0%), Victoria (+0.3%), Vancouver (+0.2%) and Calgary (+0.2%). On the other hand, decreases were observed in 6 of the 20 CMAs not included in the composite index for which data are available in November. The biggest monthly decreases were seen in Kingston (-12.5% after a 4.8% rise the previous month), Oshawa (-5.1%), Moncton (-3.5% after a 5.2% rise the previous month) and Sherbrooke (-3.5%). Conversely, the biggest increases were in Saint John (+7.2% after a drop of 5.1% the previous month), Belleville (+4.4%) and Thunder Bay (+4.2%).

Before seasonal adjustments, the Teranet-National Bank Composite House Price Index™ fell by 0.9% from October to November, the second consecutive monthly decline.

Year-Over-Year

The Teranet-National Bank Composite Home Price Index™ rose by 3.2% from November 2022 to November 2023. Increases were observed in 9 of the 11 cities making up the composite index in October. Quebec City led the way with a year-over-year price increase of 8.5%, followed by Halifax with an 8.2% gain and Vancouver with 6.3% growth. As for the lagging markets, prices fell in Edmonton (-2.3%) and remained stable in Hamilton. As for the other 20 CMAs not included in the composite index, annual gains were observed in 15 of them. The strongest growth was recorded in Saint John (+12.5%) and Thunder Bay (+11.0%), while the steepest declines were in Kingston (-7.8%) and Barrie (-2.1%).

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Teranet-National Bank House Price Index Continues Its Correction in November

No Gift for Homeowners, Prices will Continue to Fall