House prices continue to rise in October as market gains momentum

The composite index rose by 0.3% in October, the fourth consecutive monthly increase, as the effects of the monetary easing cycle begin to be felt more strongly in the housing market. The number of transactions on the resale market surged in October, thanks in particular to a reduction in fixed mortgage interest rates since the summer, and because the Bank of Canada was widely expected to step up the pace of interest rate cuts. As a result, conditions on the resale market tightened further in October, with a seller’s market that is synonymous with upward price support. With the central bank expected to continue easing monetary policy over the coming months in order to return rapidly to neutral territory, and with the extension of the amortization period to 30 years for insured mortgages in December, the housing market could remain buoyant over the next few months, provided that the deterioration in the labour market remains limited. However, given the challenges of affordability, which remain unresolved despite a slight improvement in the last quarter, house prices could see only moderate growth.

MONTH-OVER-MONTH

After adjusting for seasonal effects, the Teranet-National Bank Composite House Price Index™, which covers the country’s eleven largest CMAs, rose by 0.3% from September to October, the fourth consecutive monthly increase. In October, six of the 11 CMAs included in the index recorded growth: Quebec City (+2.0%), Hamilton (+1.3%), Ottawa-Gatineau (+0.8%), Montreal (+0.4%), Toronto (+0.4%) and Winnipeg (+0.4%). Conversely, prices fell in Victoria (-1.3%), Halifax (-0.9%), Calgary (-0.5%) and Edmonton (-0.1%), while they remained stable in Vancouver. On the other hand, thirteen of the 20 CMAs not included in the composite index for which data are available in October recorded increases. The strongest monthly gains were seen in Sudbury (+4.6% after a fall of 2.4% the previous month), Thunder Bay (+4.3% after a fall of 2.8% the previous month) and Saint John (+2.8%). Conversely, the biggest falls were in Sherbrooke (-9.1%), Moncton (-3.4% after a rise of 4.1% the previous month) and Guelph (-0.8%).

Before seasonal adjustments, the Teranet-National Bank Composite House Price Index™ actually fell by 0.6% between September and October, the third consecutive monthly decline.

YEAR-OVER-YEAR

The Teranet-National Bank Composite Home Price Index™ rose by 1.4% from October 2023 to October 2024, higher than the 1.0% growth seen the previous month. Increases were observed in eight of the 11 cities making up the composite index in October. Quebec City and Calgary led the way with year-on-year price rises of 10.2%, followed by Edmonton with a 7.3% gain and Ottawa-Gatineau with a 5.4% increase. As for the lagging markets, prices fell in Victoria (-2.5%), Toronto (-1.1%) and Hamilton (-1.0%). As for the 20 other CMAs not included in the composite index, annual gains were observed in fourteen of them. Among the rising markets, the strongest growth was recorded in Saint-John (+18.4%), Trois-Rivières (+17.2%), Sudbury (+12.2%) and Thunder Bay (+12.2%). Conversely, the markets with the biggest declines were Kelowna (-6.1%), Oshawa (-2.5%) and Sherbrooke (-2.4%).

Source: Teranet-National Bank