The Teranet-National Bank Composite House Price Index (HPI) jumped 2.2 per cent in June, marking not only the third consecutive monthly rise but also the most significant price jump in a single month since November 2006.

Broad-based growth: 81% of cities see housing price increases in June

The housing price rebound has been widespread across the country, with a 81 per cent of cities covered by the Teranet-National Bank HPI experiencing price increases in June. 

Darren King, an investment advisor with National Bank, referred to the spike as “spectacular” in the July memo, writing, “After a cumulative decline of 8.7 per cent since peaking in April 2022, recent rises in the composite index have erased part of this correction, which now stands at just 6.2 per cent.” 

Potential challenges ahead: Rate hikes and economic weakness could impact future prices

Before seasonal adjustments, the index rose 2.6 per cent from May to June, marking the fourth consecutive monthly increase. After accounting for seasonal effects, the 2.2 per cent rise in June is significant and demonstrates a steady upward trajectory for the housing market.

Looking at specific cities, Toronto and Vancouver led the way with notable increases of 2.9 per cent and 2.6 per cent, respectively. Other major cities, such as Quebec City, Halifax, and Calgary, also saw healthy price rises in the range of 2.1 per cent to 2.6 per cent. Winnipeg experienced a slight decrease of 0.2 per cent, while Hamilton’s prices remained stable.

Year-over-year 

From June 2022 to June 2023, the Teranet-National Bank Composite House Price Index experienced an overall contraction of 5.1 per cent, a smaller decline compared to the previous month. 

Among the cities included in the composite index, Calgary exhibited the most significant year-over-year price increase with a 6.5 per cent gain. Quebec City and Edmonton also registered positive year-on-year growth with increases of 5.2 per cent and 1.3 per cent, respectively. However, Hamilton, Ottawa-Gatineau, and Toronto faced the steepest declines at -13.4 per cent, -8.4 per cent, and -6.7 per cent, respectively.

Outside of the composite index, other cities have seen mixed results. Some markets, such as Trois-Rivières, Lethbridge, and Sherbrooke, recorded annual gains, while others like St. Catharines, Brantford, Abbotsford-Mission, and Peterborough experienced price declines.

Potential challenges ahead

It’s important to note the Teranet-National Bank Composite HPI is based on closed transactions — so it typically lags behind the market; experts caution that potential challenges may lie ahead. 

King writes, “While prices could continue to be supported by strong demographic growth and the lack of supply of properties on the market, and continue to rise in the third quarter, the Bank of Canada’s recent rate hikes and the economic weakness expected in subsequent quarters will represent a headwind for house prices thereafter.”