Canadian Home Prices Hit April 2023 Lows: What Eight Months of Declines Mean for Your Equity
The Teranet-National Bank Composite House Price Index sits at a level last seen 30 months ago. That number, April 2023, is not a catastrophe. It's a psychological floor with weight attached.
Eight of the last nine months have posted declines. The national index is down. The Greater Toronto Area is down 3.9% year-over-year through July. Vancouver West detached homes, which peaked above $2 million, now benchmark between $1.78 million and $1.82 million. Montreal sales volume dropped 13% in August. The pattern is broad, the trajectory flat.
For homeowners who bought between 2020 and early 2022, the equity picture is straightforward: gone, diminished, or converted into years of carrying cost you didn't plan for. A $900,000 semi purchased in Etobicoke in February 2021 at 1.79% is now worth roughly what it was worth in April 2023, and the mortgage renewing in 2026 will reset somewhere north of 5%. The asset didn't appreciate. The liability got more expensive. That's the math.
Why this correction stuck around longer than expected
The Bank of Canada began cutting rates in mid-2025. By conventional logic, demand should have firmed up and prices should have stabilized within three to six months. They didn't. Inventory in the GTA and Greater Vancouver reached multi-year highs. Months of inventory across Canada sat at 4.8 months as of August 2026, well above the seller's-market threshold of three. The buyers who were supposed to return stayed on the sidelines longer than the industry expected.
Part of that is the mortgage renewal wall. Millions of Canadians who locked in at under 2% between 2020 and 2021 are renewing in 2025 and 2026 at rates three to four percentage points higher. Some of those households are selling proactively. Others are selling because they can't manage the reset. Either way, supply is coming from the cohort that was supposed to stay put.
The other part is sentiment. For the first time in years, fear of missing out has been replaced by fear of overpaying. Buyers are submitting conditional offers again. Days on market have lengthened. Negotiation leverage has shifted. The psychology that drove the 2020-2021 run-up, buy now or lose access forever, no longer holds.
The illusion of cheaper ownership
Prices are lower, but property taxes in Ontario rose an average of 4% to 6% in most municipalities in 2026. Home insurance premiums climbed faster than inflation, particularly for older builds. Maintenance on a house deferred during the pandemic now costs more due to labour shortages and material price stickiness. A buyer paying $850,000 in 2026 for a home that sold for $950,000 in 2022 is not necessarily better off once insurance, tax, and the prevailing 5%-plus mortgage rate are factored in.
The rental market complicates the picture further. Despite falling purchase prices, rents in Toronto, Vancouver, and Montreal have not dropped proportionally. The buy-versus-rent calculation, which should favour buying when prices fall, remains distorted by sticky rental supply and elevated interest costs.
What April 2023 actually means
April 2023 is the level where institutional investors, REITs, and pension funds began to reassess their exposure to Canadian residential real estate. Breaking below it signals something more than cyclical correction. It suggests the floor everyone assumed was structural might not be.
Canada remains hundreds of thousands of units short of the CMHC's affordability-by-2030 target of 3.5 million new homes. Supply constraints haven't gone away. But supply constraints don't prevent price declines when demand pulls back harder than expected. The current dip is cyclical. The question is whether the cycle has another leg down or whether we're already at the floor.
The answer depends on how many more households have mortgages renewing in the next 12 months, and whether those households can absorb the rate shock without selling.
The Teranet-National Bank Composite House Price Index sits at a level last seen 30 months ago. That number, April 2023, is not a catastrophe. It's a psychological floor with weight attached.
Eight of the last nine months have posted declines. The national index is down. The Greater Toronto Area is down 3.9% year-over-year through July. Vancouver West detached homes, which peaked above $2 million, now benchmark between $1.78 million and $1.82 million. Montreal sales volume dropped 13% in August. The pattern is broad, the trajectory flat.
For homeowners who bought between 2020 and early 2022, the equity picture is straightforward: gone, diminished, or converted into years of carrying cost you didn't plan for. A $900,000 semi purchased in Etobicoke in February 2021 at 1.79% is now worth roughly what it was worth in April 2023, and the mortgage renewing in 2026 will reset somewhere north of 5%. The asset didn't appreciate. The liability got more expensive. That's the math.
Why this correction stuck around longer than expected
The Bank of Canada began cutting rates in mid-2025. By conventional logic, demand should have firmed up and prices should have stabilized within three to six months. They didn't. Inventory in the GTA and Greater Vancouver reached multi-year highs. Months of inventory across Canada sat at 4.8 months as of August 2026, well above the seller's-market threshold of three. The buyers who were supposed to return stayed on the sidelines longer than the industry expected.
Part of that is the mortgage renewal wall. Millions of Canadians who locked in at under 2% between 2020 and 2021 are renewing in 2025 and 2026 at rates three to four percentage points higher. Some of those households are selling proactively. Others are selling because they can't manage the reset. Either way, supply is coming from the cohort that was supposed to stay put.
The other part is sentiment. For the first time in years, fear of missing out has been replaced by fear of overpaying. Buyers are submitting conditional offers again. Days on market have lengthened. Negotiation leverage has shifted. The psychology that drove the 2020-2021 run-up, buy now or lose access forever, no longer holds.
The illusion of cheaper ownership
Prices are lower, but property taxes in Ontario rose an average of 4% to 6% in most municipalities in 2026. Home insurance premiums climbed faster than inflation, particularly for older builds. Maintenance on a house deferred during the pandemic now costs more due to labour shortages and material price stickiness. A buyer paying $850,000 in 2026 for a home that sold for $950,000 in 2022 is not necessarily better off once insurance, tax, and the prevailing 5%-plus mortgage rate are factored in.
The rental market complicates the picture further. Despite falling purchase prices, rents in Toronto, Vancouver, and Montreal have not dropped proportionally. The buy-versus-rent calculation, which should favour buying when prices fall, remains distorted by sticky rental supply and elevated interest costs.
What April 2023 actually means
April 2023 is the level where institutional investors, REITs, and pension funds began to reassess their exposure to Canadian residential real estate. Breaking below it signals something more than cyclical correction. It suggests the floor everyone assumed was structural might not be.
Canada remains hundreds of thousands of units short of the CMHC's affordability-by-2030 target of 3.5 million new homes. Supply constraints haven't gone away. But supply constraints don't prevent price declines when demand pulls back harder than expected. The current dip is cyclical. The question is whether the cycle has another leg down or whether we're already at the floor.
The answer depends on how many more households have mortgages renewing in the next 12 months, and whether those households can absorb the rate shock without selling.
Read Next
Asset managers cut product portfolios to fund AI and outsourcing overhauls
ETFs now hold 42% of Canadian fund assets as OSC tightens crypto and liquidity rules
One in Five Canadian Parents Still Pays Bills for Kids in Their Late Thirties
Joint mortgages surge in Ontario and B.C. as first-time buyers face rising delinquency pressure