Canada’s housing market is showing faint signs of revival, according to a new report from RBC assistant chief economist Robert Hogue.
Data from local real estate boards indicates that sales activity ticked upward in May across several cities where sales previously pulled back, hinting at a recovery in a sector rattled by a trade war and lingering economic uncertainty.
This was the case for Toronto, Ottawa, Calgary, Edmonton, Fraser Valley, Saskatoon and Regina where the number of transactions partially rebounded from significant declines earlier this year.
“The de-escalation of tariffs has taken centre stage since May, alleviating some of the worst fears about the potential economic fallout even though recent doubling of steel and aluminum tariffs increases risks in some communities,” said Hogue. “We expect to get a clearer view in the coming months.”
Different stories across the country
Markets in southern Ontario and parts of British Columbia, the country’s least affordable areas, remain especially soft,RBCRBC Hogue notes. Activity in many of them is close to cyclical lows and will take time to rebound to more robust levels.
These markets are also where prices are under the most downward pressure. The MLS Home Price Index fell again in several markets in May from April, including the Toronto region, Hamilton, Kitchener-Waterloo, Cambridge, Vancouver and Fraser Valley.
Trends in other parts of the country are relatively sturdier. Prairie markets such as Edmonton, Saskatoon, Regina, and some in Quebec, including Quebec City, and the Atlantic region like St. John’s have held up so far, “albeit they are not entirely unscathed from trade-induced anxiety,” said Hogue.
Toronto: A hesitant uptick
Toronto appears to be regaining its footing. Home resales rose 8.4 per cent in May over April on a seasonally adjusted basis, marking a second straight monthly increase. While the volume remains well below pre-pandemic highs, the upward trend suggests that sentiment is shifting.
Buyers continue to enjoy leverage. Inventory is at its highest in decades, putting pressure on sellers. Home prices remain under stress, with the MLS Home Price Index down 4.5 per cent from May 2024, even as it ticked up slightly month-over-month.
Montreal: Resilience amid uncertainty
Montreal has been steadier in the face of economic turbulence. Resale activity slipped just 2 per cent between April and May, and remains at what Hogue calls “solid pre-pandemic levels.” A reasonably balanced market has kept upward pressure on prices.
Single-family homes saw an 8.6 per cent year-over-year price increase in May, with condos rising 4.3 per cent. That pace is expected to moderate as more sellers enter the market, said Hogue.
Vancouver: Slowdown persists
Resales dropped again in May, marking six straight months of decline, while inventory swelled to a 12-year high, fueled by an influx of unsold condo completions.
The result: falling prices. The city’s MLS HPI was down 2.9 per cent from a year ago in May, and downward momentum is expected to continue in the near term.
Calgary: Defying the trend
Calgary stands out for its resilience. May resale activity jumped more than 8 per cent following three months of declines. A fast-growing population and strong job growth – three times the national average – continue to drive demand.
While the city’s HPI dipped 2.5 per cent year-over-year, new construction has helped keep prices in check without deterring buyers.
