House price index

From 2020 to 2025, the Canadian House Price Index showed pronounced volatility against the backdrop of global and domestic market shocks. In 2020, the index stood at 162.9, reflecting record-setting price growth that began during the COVID-19 pandemic. Low interest rates, generous federal stimulus, and a surge in demand driven by urban exodus and remote work led Canadian home prices to reach historic highs. The robust momentum continued in 2021, when the index rose 8.9% to 177.4, as bidding wars, limited supply, and a pace of appreciation unrivaled since the recovery period following the global financial crisis drove values upward.

By 2022, the index peaked at 181.1. This high watermark signaled the final phase of a multi-year price boom strengthened by demographic demand, investor purchases, and home renovations. However, an aggressive series of Bank of Canada interest rate hikes, paired with declining affordability and regulatory tightening, led to a reversed trajectory. In 2023, the index dropped 9.9% to 163.2—the largest single-year correction since 1981—followed by a further contraction of 4.4% in 2024 and 4.6% in 2025, which brought the index to 148.9.

In total, the index declined by 8.6% (or 14.0 points) between 2020 and 2025, with a compound annual decline rate of -1.8%. The corrected path from the 2022 high to the 2025 projected trough—down 17.8%—has restored a measure of affordability and reduced speculative fervor. Regional divergence remains stark, with Alberta and Atlantic Canada exhibiting sustained demand, while Ontario and British Columbia experienced longer, deeper corrections. This market cycle underscores Canada's housing market sensitivity to macroeconomic shifts, rapid changes in borrower costs, and evolving policy responses.