The composite index rose by 0.8% in December, the sixth consecutive monthly increase and a larger rise than the 0.7% recorded the previous month. As a result, prices have grown by a cumulative 2.9% since the Bank of Canada’s first rate cut in June and are now just 0.3% below the record level reached in April 2022. This acceleration in prices comes as the effects of the monetary easing cycle continue to be felt in the housing market. The number of sales on the residential market has picked up and market conditions are still favourable to sellers, encouraging price rises. With the central bank expected to continue its monetary easing in the months ahead, and with the extension of the 30-year amortization period for insured mortgages in December, the housing market could remain buoyant in the months ahead, provided the deterioration in the labour market remains limited. However, given affordability challenges and much slower population growth, the pace of house price appreciation should be moderate.

Month-Over-Month

After adjusting for seasonal effects, the Teranet-National Bank Composite House Price IndexTM, which covers the country’s eleven largest CMAs, rose by 0.8% from November to December, a larger increase than the 0.7% recorded the previous month and the sixth consecutive monthly increase. As a result, prices have risen by 2.9% since the Bank of Canada’s first cut in June and are now just 0.3% below the record level reached in April 2022. In December, nine of the 11 CMAs included in the index recorded growth: Edmonton (+1.6%), Ottawa-Gatineau (+1.0%), Montreal (+1.0%), Toronto (+0.8%), Halifax (+0.8%), Calgary (+0.7%), Vancouver (+0.6%), Winnipeg (+0.6%) and Hamilton (+0.5%). Conversely, prices fell in Victoria (-0.3%) and Quebec (-0.4%). In addition, prices rose in twelve of the 18 CMAs not included in the composite index for which data are available in December. The strongest monthly increases were seen in Kelowna (+4.5%), Belleville (+2.3%) and Kitchener (+2.2% after a decline of -2.2% the previous month). Conversely, the largest decreases were recorded in Trois-Rivières (-2.6% after an increase of 3.0% the previous month), Brantford (-1.8%) and Lethbridge (-1.7% after an increase of 3.4% the previous month).

Before seasonal adjustments, the Teranet-National Bank Composite House Price IndexTM fell by 0.1% from November to December.

Year-Over-Year

The Teranet-National Bank Composite Home Price IndexTM rose by 3.6% from December 2023 to December 2024, higher than the 2.4% growth seen the previous month. Increases were seen in all 11 cities in the composite index in December. Quebec City led the way with year-on-year price rises of 10.3%, followed by Calgary with an 8.0% gain and Montreal with 7.5% growth. As for the 18 other CMAs not included in the composite index, annual gains were recorded in sixteen of them. The strongest growth was recorded in Kingston (+19.9%), Trois-Rivières (+13.5%), Lethbridge (+11.5%) and Thunder Bay (+11.5%). Conversely, the markets of Brantford (-2.3%) and Barrie (-4.1%) were down.

On an annual average basis, the composite index rose by 3.3% in 2024 following a fall of 2.0% in 2023.

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Teranet-National Bank House Price Index Accelerates in December