After remaining relatively stable since the start of 2024, house prices in Canada’s major urban centers rose by 0.5% from April to May, against a backdrop of renewed optimism following the start of the monetary easing cycle by the Bank of Canada. The increase observed in May was entirely due to a rise in prices in the non-condo segment (+0.7%), while condo prices have remained relatively stable since August 2023 as inventory in this segment continues to accumulate. While record population growth, the shortage of housing supply and the start of rate cuts by the Bank of Canada will continue to support the Canadian real estate market in the months ahead, we are cautiously optimistic about the magnitude of any recovery in the housing market in the months ahead and its potential impact on prices. Indeed, many uncertainties remain, including the risk of a further deterioration in the labour market, particularly among young people who are facing the worst affordability conditions in decades.

Month-Over-Month

After adjusting for seasonal effects, the Teranet-National Bank Composite House Price Index™, which covers the country’s eleven largest CMAs, rose by 0.5% from April to May, after remaining stable the previous month. In May, seven of the 11 CMAs included in the index recorded growth: Halifax (+1.5%), Hamilton (+1.1%), Calgary (+1.0%), Vancouver (+1.0%), Victoria (+0.8%), Toronto (+0.5%) and Quebec City (+0.4%). Conversely, decreases were recorded in Edmonton (-0.7%), Winnipeg (-0.6%) and Ottawa-Gatineau (-0.2%), while prices remained stable in Montreal during the month. On the other hand, increases were observed in fifteen of the 20 CMAs not included in the composite index for which data are available in May. The strongest monthly gains were seen in Saint John (+8.8%) and Lethbridge (+2.1%). Conversely, the biggest declines were in Guelph (-3.0% after a 5.8% rise the previous month) and Sudbury (-2.9%).

Before seasonal adjustments, the Teranet-National Bank Composite House Price Index™ rose by 1.7% from April to May, the fourth consecutive monthly increase. Moreover, increases were observed in ten of the 11 cities making up the index, Edmonton being the exception (-0.2%). For markets on the rise, growth ranged from +4.0% in Halifax to +1.0% in Hamilton.

Year-Over-Year

The Teranet-National Bank Composite Home Price Index™ rose by 5.7% from May 2023 to May 2024, a growth rate similar to that observed the previous month. Increases were observed in all 11 cities making up the composite index in May. Calgary led the way with a 16.4% year-on-year price increase, followed by Halifax with an 11.4% gain and Vancouver with 8.7% growth. As for lagging markets, prices rose less than average in Winnipeg (+1.9%), Victoria (+2.2%), Toronto (+2.8%), Hamilton (+5.0%) and Montreal (+5.5%). As for the other 20 CMAs not included in the composite index, annual gains were observed in all of them. The strongest growth was recorded in Moncton (+17.9%) and Saint John (+14.6%), while the smallest increases were in Guelph (+0.9%) and London (+1.3%).

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Teranet-National Bank House Price Index Increased in May

Prices Up in May Despite A Persistently Sluggish Resale Market