Teranet-National Bank Index fell in August for the eighth time in nine months
Canadian home prices slid to their weakest level in more than three years in August, extending a correction that has now erased 4.2% of value from the national market's peak less than a year ago.
The Teranet-National Bank Composite House Price Index, which tracks repeat-sale transactions across Canada's 11 largest census metropolitan areas (CMAs), fell 0.2% from July to August. That's the eighth monthly decline in nine months and a reversal of the slight 0.1% gain recorded the previous month.
On a seasonally adjusted basis, the index fell 0.6%, its first such decline in six months.
"This contraction marks the eighth decline in nine months, pushing prices down 4.2% from their most recent peak in November 2025 and to their lowest level since April 2023," said Daren King, an economist with the Economics & Strategy Group of National Bank of Canada, in the report.
The national composite index now sits at a level not seen since April 2023.
The August drop followed a brief lift in activity during the spring and summer, a modest resurgence that the report attributed to improving labour market conditions and some easing in affordability.
Regional splits reveal a market at odds with itself
Six of the 11 cities within the composite index posted month-over-month declines in August. Vancouver led the retreat with a 1.6% drop, followed by Halifax (-0.6%), Winnipeg (-0.3%), Hamilton (-0.3%), Ottawa-Gatineau (-0.15%), and Edmonton (-0.1%).
Five CMAs moved in the opposite direction: Victoria gained 0.5%, Quebec City and Toronto each rose 0.4%, Montreal was up 0.3%, and Calgary edged 0.2% higher.
Among the 20 CMAs outside the composite index, 10 also recorded declines. The steepest were concentrated in smaller Ontario and Atlantic markets — Saint John fell 7.2% month over month, St. Catharines dropped 3.3%, and Belleville declined 2.7%.
Thunder Bay (+3.9%), Lethbridge (+3.2%), and Abbotsford-Mission (+1.9%) led the gains.
Annual figures revealed a deeper picture of deterioration. The composite index fell 3.6% year over year between August 2025 and August 2026, steeper than the 3.2% annual decline recorded in July.
Vancouver led the year-over-year losses at -6.5%, followed by Hamilton at -6.2% and Toronto at -6.1%, the same three cities that have anchored the composite's decline for much of 2026.
That regional concentration aligns with CMHC's updated Canadian housing market forecast, which projected that British Columbia and Ontario would face the heaviest headwinds through the forecast period.
Quebec City remained the national outlier, posting a 9.0% year-over-year price gain that extended its run as the country's strongest performing major market. Montreal rose 4.1% annually and Winnipeg added 2.4%.
Among the non-composite CMAs, 15 of 20 posted year-over-year declines, with St. Catharines (-8.9%), Barrie (-7.7%), and Guelph (-7.3%) among the hardest hit. Thunder Bay (+13.0%) and Trois-Rivières (+5.9%) were the notable exceptions.
Robert Kavcic of BMO Capital Markets says August marked the end of the market's recent streak of modest gains, with sales weakening and higher bond yields continuing to put pressure on mortgage rates.https://t.co/N4GXfWA0eK
— Canadian Mortgage Professional Magazine (@CMPmagazine) September 16, 2026
Rising bond yields cloud the affordability picture
The August data landed against a backdrop of rising financing costs. The National Bank report noted that a sharp increase in US bond yields has pushed Canadian bond yields higher.
While the effect on mortgage rates has been limited to date, King warned that higher financing costs are expected in the coming weeks for households looking to secure new mortgage arrangements.
"This increase will therefore limit their borrowing capacity and weigh on price growth," the report said, adding that housing affordability "is expected to deteriorate over the coming quarters."
Home sales began declining again in August, the report noted, at the same time that the earlier upswing in employment growth appeared to be fading, a combination that removed two of the key supports that had briefly stabilised prices over the summer.
The convergence of falling sales activity, rising bond yields, and a national price level now sitting at a more than three-year low suggests brokers may be operating in a window of compressed affordability gains that is narrowing faster than anticipated.
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