The Teranet-National Bank Composite Index continued to decline in February, falling 0.5% on a month-over-month basis. As a result, prices have decreased by 1.1% over the past three months. This decline comes at a time when the number of transactions in the resale market fell for a fourth consecutive month in February, despite the Bank of Canada’s policy rate cuts last fall. On an annual basis, the composite index fell by 4.4% compared to February 2025, a sharper decline than the 4.0% drop recorded the previous month. However, the price decline was not observed across the entire country. In fact, improved affordability due to more favourable fixed and variable interest rates, coupled with resilient household incomes, supported price growth in certain regions. This is particularly true of the Quebec and Prairie markets, 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 remains possible in 2026, the persistent weakness of the market in Ontario and British Columbia is expected to limit short-term price increases at the national level. Recent cuts to the Bank of Canada’s key interest rates have provided some relief, but fixed mortgage rates could begin to rise again in 2026 due to inflationary pressures stemming from the conflict in the Middle East. Combined with population growth that is expected to moderate even further, these factors could continue to weigh on the residential market outlook.

Month-Over-Month

The Teranet-National Bank Composite House Price Index™, which covers the country’s eleven largest CMAs, fell by 0.5% from January to February, marking a third consecutive monthly decline (seasonally adjusted). In February, eight of the 11 CMAs included in the index recorded declines: Hamilton (-2.1%), Montreal (-1.0%), Winnipeg (-0.9%), Halifax (-0.8%), Toronto (-0.7%), Victoria (-0.6%), Ottawa-Gatineau (-0.6%), and Vancouver (-0.2%). Prices remained stable in Calgary, while they rose in Quebec City (+1.0%) and Edmonton (+1.2%). Additionally, declines were observed in 11 of the 20 CMAs not included in the composite index for which data were available in February. The sharpest monthly declines were recorded in Barrie (-6.6%), Brantford (-6.3%), Saint John (-6.2%), and Peterborough (-4.8%). Conversely, the largest increases were observed in Thunder Bay (+6.2%), Kelowna (+4.9% after -2.5% the previous month), and Sherbrooke (+3.1%).

Before seasonal adjustments, the Teranet-National Bank Composite House Price Index™ declined by 0.5% from January to February, marking the tenth decline in eleven months.

Year-Over-Year

The Teranet-National Bank Composite Home Price Index™ fell by 4.4% between February 2025 and February 2026, a steeper decline than the 4.0% drop recorded the previous month. Declines were recorded in six of the 11 cities included in the composite index in February. Hamilton led the way with a 9.1% year-over-year price decline, followed by Toronto (-8.6%), and Vancouver (-6.0%). Conversely, the strongest increases were observed in Quebec City (+12.1%), Edmonton (+4.1%), and Montreal (+3.4%).

Among the 20 other CMAs not included in the composite index, 13 posted annual declines. Among the declining markets, the sharpest drops were recorded in Peterborough (-11.6%), Barrie (-10.9%), and Brantford (-10.3%). Conversely, the strongest increases were observed in Thunder Bay (+20.0%), Lethbridge (+8.9%), and Sherbrooke (+8.5%).

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Teranet-National Bank House Price Index™ Falls for A Third Consecutive Month by Daren King | Economist | Nation Bank of Canada