Canada’s housing market is displaying faint signs of recovery, as per a recent report by RBC assistant chief economist Robert Hogue.
Data from local real estate boards suggests that sales activity increased in May in several cities where sales had previously declined, indicating a potential revival in a sector impacted by a trade war and economic uncertainty.
Cities like Toronto, Ottawa, Calgary, Edmonton, Fraser Valley, Saskatoon, and Regina saw a partial rebound in the number of transactions from earlier significant declines this year.
“The easing of tariffs has become the focus since May, easing some concerns about the economic repercussions, although recent steel and aluminum tariff increases pose risks in certain communities,” stated Hogue. “A clearer outlook is expected in the upcoming months.”
Different stories across the country
Markets in southern Ontario and parts of British Columbia, the country’s least affordable areas, continue to be soft, according to RBC’s Hogue. Activity in these regions is close to cyclical lows and will take time to recover to stronger levels.
These markets are also experiencing downward pressure on prices. The MLS Home Price Index decreased in several markets in May compared to April, including the Toronto region, Hamilton, Kitchener-Waterloo, Cambridge, Vancouver, and Fraser Valley.
Meanwhile, trends in other parts of the country are relatively more stable. Prairie markets like Edmonton, Saskatoon, Regina, some areas in Quebec such as Quebec City, and the Atlantic region like St. John’s have held up reasonably well, despite trade-related concerns, as per Hogue.
Toronto: A hesitant uptick
Toronto seems to be recovering. Home resales increased by 8.4% in May compared to April on a seasonally adjusted basis, marking a second consecutive monthly rise. Although still below pre-pandemic levels, this upward trend indicates a shift in sentiment.
Buyers are currently in a favorable position with high inventory levels, putting pressure on sellers. Home prices remain stressed, with the MLS Home Price Index down 4.5% from May 2024, despite a slight month-over-month increase.
Montreal: Resilience amid uncertainty
Montreal has shown resilience amidst economic challenges. Resale activity only decreased by 2% between April and May, remaining at strong pre-pandemic levels, according to Hogue. A balanced market has kept upward pressure on prices.
Single-family homes saw an 8.6% year-over-year price increase in May, while condos rose by 4.3%. This pace is expected to slow down as more sellers enter the market, as per Hogue.
Vancouver: Slowdown persists
Resales continued to decline in Vancouver in May for the sixth consecutive month, while inventory reached a 12-year high due to unsold condo completions.
This has led to falling prices, with the city’s MLS HPI down by 2.9% from a year ago in May, and further downward momentum expected in the near future.
Calgary: Defying the trend
Calgary stands out for its resilience. Resale activity in May increased by over 8% following three months of declines. The city’s fast-growing population and strong job growth, three times the national average, continue to drive demand.
While Calgary’s HPI decreased by 2.5% year-over-year, new construction has helped maintain prices without discouraging buyers.
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