After almost a year in the doldrums, house prices in Canada’s major urban centers rose by 0.5% for the second consecutive month, supported by more advantageous interest rates. Despite a significant rise in the number of new listings on the resale market, inventory has been stalling over the past four months due to a large number of sellers deciding to cancel their listings each month, thus limiting the deterioration in market conditions for the time being. However, we do not believe that this is the start of a significant upward trend in home prices across the country since, despite the continuing cycle of monetary policy easing, the resale market remains sluggish, showing no signs of significant recovery. Indeed, although interest rates have fallen, affordability conditions remain extremely difficult and the job market less buoyant, particularly for young people. With the Bank of Canada set to make further rate cuts in the coming months, and with the announcement of an increase in amortization from 25 to 30 years for insured mortgages to come in December, it’s likely that many buyers and sellers have decided to be patient and will sit on the sidelines in the months ahead, waiting for even more favourable financing conditions. After a few months in the doldrums, housing market activity could pick up again in 2025.

Month-Over-Month

After adjusting for seasonal effects, the Teranet-National Bank Composite House Price Index™, which covers the country’s eleven largest CMAs, grew by 0.5% from August to September, the third consecutive monthly increase. In September, eight of the 11 CMAs included in the index recorded growth: Montreal (+2.4%), Winnipeg (+1.8%), Victoria (+1.2%), Edmonton (+1.1%), Ottawa-Gatineau (+0.9%), Halifax (+0.8%), Calgary (+0.5%) and Toronto (+0.3%). Conversely, declines were recorded in Quebec City (-0.9%), Hamilton (-0.6%) and Vancouver (-0.2%). On the other hand, eleven of the 20 CMAs not included in the composite index for which data are available in September recorded increases. The strongest monthly increases were seen in Belleville (+7.4% after a 5.0% decline the previous month), Kingston (+4.3%) and Trois-Rivières (+4.0%). Conversely, the biggest declines were in Thunder Bay (-2.9% after an increase of 4.0% the previous month), Lethbridge (-1.1%) and Sherbrooke (-0.8% after an increase of 6.8% the previous month).

Before seasonal adjustments, the Teranet-National Bank Composite House Price Index™ actually fell by 1.4% from August to September, the second consecutive monthly decline.

Year-Over-Year

The Teranet-National Bank Composite House™ Price Index rose by 1.0% from September 2023 to September 2024, less than the 1.1% growth seen the previous month. Increases were observed in seven of the 11 cities making up the composite index in September. Calgary led the way with a 10.6% year-on-year price increase, followed by Quebec City with a 9.1% gain and Montreal with 6.9% growth. As for lagging markets, prices fell in Toronto (-2.6%), Hamilton (-2.5%) and Victoria (-0.2%), while they remained stable in Vancouver. As for the other 20 CMAs not included in the composite index, annual gains were observed in twelve of them. Among the rising markets, the strongest growth was recorded in Trois-Rivières (+17.0%), Moncton (+11.6%) and Kingston (+10.8%). Conversely, the markets with the biggest declines were Kelowna (-6.1%), London (-2.6%) and Oshawa (-2.6%).

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Teranet-National Bank House Price Index Continues to Rise in September

House Prices Continue to Rise While Supply Stagnates