After remaining relatively stable over the previous two months, house prices in Canada’s major urban centres rose more significantly in August, increasing by 0.6%, supported by lower interest rates. However, we do not believe that this marks the start of a significant upward trend in Canadian home prices 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, they remain deeply in restrictive territory. As a result, affordability conditions remain extremely difficult, while the labour market continues to deteriorate across the country, and even more acutely among young people. What’s more, with the Bank of Canada indicating that it intends to make further rate cuts in the months ahead, and with the announcement of an increase in amortization from 25 to 30 years to come in December, it’s likely that some buyers will decide to be patient in the months ahead and sit on the sidelines waiting for even more favourable financing conditions. After a few months in the doldrums, the housing market could start to 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 0.6% from July to August, the second consecutive monthly increase. In August, six of the 11 CMAs included in the index recorded growth: Quebec City (+3.9%), Halifax (+3.2%), Ottawa-Gatineau (+1.9%), Vancouver (+1.7%), Montreal (+1.0%) and Toronto (+0.2%). Conversely, decreases were recorded in Hamilton (-0.1%), Winnipeg (-0.7%), Calgary (-1.1%) and Edmonton (-2.6%), while prices remained stable in Victoria during the month. On the other hand, price increases were observed in fifteen of the 20 CMAs not included in the composite index for which data are available in August. The strongest monthly increases were seen in Sherbrooke (+8.1%) and Thunder Bay (+4.1%). Conversely, the biggest declines were in Belleville (-3.9%), Oshawa (-0.5%) and Lethbridge (-0.5%).

Before seasonal adjustments, the Teranet-National Bank Composite House Price Index™ actually fell by 0.3% from July to August, the first contraction in seven months.

Year-Over-Year

The Teranet-National Bank Composite Home Price Index™ rose by 1.1% from August 2023 to August 2024, less than the 2.0% growth seen the previous month. Increases were observed in eight of the 11 cities making up the composite index in August. Quebec City led the way with a 10.7% year-on-year price increase, followed by Calgary with a 10.0% gain and Halifax with 5.4% growth. As for lagging markets, prices fell in Toronto (-2.6%), Hamilton (-1.2%) and Victoria (-0.2%). As for the other 20 CMAs not included in the composite index, annual gains were observed in nine of them. Among the rising markets, the strongest growth was recorded in Sherbrooke (+16.4%), Thunder Bay (+12.4%) and Trois-Rivières (+12.0%). Conversely, the markets with the biggest declines were Belleville (-3.9%) and Kelowna (-3.8%).

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Teranet-National Bank House Price Index Rises in August

Home Prices on The Rise in August