Home sales are gaining momentum in several Canadian cities as earlier fears of an economic downturn fade, according to RBC assistant chief economist Robert Hogue. 

However, the rebound hasn’t stabilized prices in markets where affordability is strained and listings have surged.

Preliminary July figures from local real estate boards show the MLS Home Price Index continued to decline in Toronto, Vancouver and other parts of Southern Ontario and B.C.’s Lower Mainland. These regions have seen inventory rise to historically high levels.

Resale activity is picking up—most notably in Toronto—helping bring supply and demand into better balance. Over time, this could ease downward pressure on prices, according to RBC.

Prices remain more stable in the Prairies, Quebec and Atlantic Canada, where supply remains tight.

July data showed resales increased in Calgary, Edmonton, Regina and Saskatoon, building on June’s gains.

Hogue expects a broader recovery to regain traction as confidence improves, with regional price trends possibly narrowing later this year or in 2026.

“We expect a broad market recovery to get back on track across Canada as confidence builds further. Diverging price trends are likely to persist, but they could narrow later this year or next.”

Toronto

A jump in resales in Toronto confirmed the market is “turning a corner” after trade war worries dragged the market down this spring.

The Toronto Regional Real Estate Board reported 6,100 homes changed hands in July, up 13 per cent from June (seasonally adjusted) and 10.9 per cent from a year ago. 

This also marked the fourth straight monthly increase.

“This helped firm supply-demand conditions, but buyers still have the upper hand,” said Hogue.

“Decades-high inventory of homes for sale likely makes sellers more flexible to get deals done.”

Home prices continued to decline as a result, Hogue noted. The composite MLS Home Price Index slipped a further 0.2 per cent from June, and is down 5.4 per cent from a year ago.

“We expect property values will keep falling while the market gets back on a stronger footing. Affordability—while improving—will remain a big issue.”

Montreal 

“Montreal’s overall picture hasn’t changed much this year. The market’s recovery remains stagnant, but modestly tight supply supports small price gains,” said Hogue.

RBC estimates July home resales stayed within close range of where they’ve been since February on a seasonally adjusted basis. Resales are down from late 2024 levels, but still sustaining a pace that would have been considered solid before the pandemic, Hogue noted.

“Meanwhile, the number of homes for sale remains historically low, and there’s no signs of it rising in a material way with new listings falling in two of the last three months.”

Vancouver

Early signs of a rebound have emerged in the Vancouver area, said Hogue, as home resales rose for two consecutive months.

“Importantly, the upswing has brought supply and demand closer to balance. We think the sales-to-new listings ratio is now just below the threshold consistent with balanced conditions.”

Hogue said the biggest element in the market is high inventory, which is at historic levels. 

“Downward price pressure could ease if supply and demand continue to rebalance. But, we think this isn’t likely to occur quickly, nor set the stage for a rise. Severe affordability challenges will continue to be a major constraint hampering buyers’ ability to bid higher.”

Calgary

Newly built homes contributed to a build-up in inventory, and came at a time when “demand cooled in the face of economic uncertainty,” said Hogue, adding that these forces resulted in an easing of price pressure.

By July, Calgary’s composite HPI fell 3.9 per cent year-over-year.

“Still, we expect this price adjustment to be short-lived. Supply and demand are largely in balance, and active listings are far from excessive, even if it builds up further,” said Hogue.

REM Editorial Team