After rising over the previous four months, the Teranet-National Bank composite index lost momentum in December, with prices remaining unchanged compared to November. This loss of steam comes at a time when the number of transactions in the resale market declined in November and December, despite the Bank of Canada’s policy rate cuts in the fall and the improvement in the labour market in the last months of the year. On an annual basis, the composite index fell 3.5% compared to December 2024, a larger contraction than the 2.8% recorded the previous month. However, the decline in prices was not observed everywhere in the country. In fact, improved affordability, due to more favourable fixed and variable interest rates and resilient household incomes, supported price growth in some regions. This was particularly true in Quebec and the Prairies, which are more affordable than the national average and experienced the highest annual price growth. Conversely, persistent affordability challenges in Ontario and British Columbia continue to weigh on prices in an increasingly unfavourable demographic context. Although a moderate recovery in resale market activity is anticipated in 2026, persistent market weakness in Ontario and British Columbia is expected to limit short-term price increases at the national level. Recent cuts in the Bank of Canada’s key interest rates have provided some relief, but 5-year mortgage rates could start to rise again in 2026 if our scenario of economic improvement materializes. Combined with population growth that is expected to moderate further, these factors could continue to weigh on the outlook for the residential market.

Month-Over-Month

The Teranet-National Bank Composite House Price Index™, which covers the country’s eleven largest CMAs, remained stable from November to December after growing for the previous four months (on a seasonally adjusted basis). In December, six of the 11 CMAs included in the index recorded increases: Ottawa-Gatineau (+2.9% after -0.7% the previous month), Edmonton (+1.2%), Winnipeg (+1.1%), Calgary (+0.7%), Vancouver (+0.2%) and Quebec City (+0.1%). Conversely, prices declined in Hamilton (-1.8%), Halifax (-1.0% after +1.2% the previous month), Victoria (-0.8%), Toronto (-0.5%) and Montreal (-0.2%). In addition, increases were observed in ten of the 18 CMAs not included in the composite index for which data are available in December. The largest monthly increases were recorded in Peterborough (+6.1%) and Sudbury (+4.2%). Conversely, the largest declines were observed in Trois-Rivières (-3.0%), Oshawa (-2.7% after +2.0% the previous month) and Kingston (-2.6%).

Before seasonal adjustments, the Teranet-National Bank Composite House Price Index™ actually declined by 0.9% from November to December, marking the eighth decline in nine months.

Year-Over-Year

The Teranet-National Bank Composite Home Price Index™ fell by 3.5% between December 2024 and December 2025, a steeper decline than the 2.8% drop seen the previous month. However, increases were recorded in seven of the 11 cities that make up the composite index in December. Quebec City led the way with a 12.6% year-over-year price increase, followed by Edmonton (+5.1%) and Winnipeg (+5.0%). Conversely, the largest declines were observed in Toronto (-7.8%), Hamilton (-7.8%), and Vancouver (-5.9%). Of the 18 other CMAs not included in the composite index, 12 posted annual declines. Among the declining markets, the sharpest decreases were recorded in Oshawa (-8.2%), Guelph (-8.2%) and Kitchener (-8.0%). Conversely, the largest increases were observed in Lethbridge (+10.1%), Thunder Bay (+9.0%) and Sudbury (+8.8%).

On an annual average, the national composite index declined by 1.0% from 2024 to 2025, following a 3.3% increase the previous year.

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Housing Prices Lose Momentum as The Year Draws to A Close

Teranet-National Bank House Price Index Ends The Year Unchanged by Daren King | Economist | National Bank of Canada