Canada’s spring housing market got off to a slow start, with momentum tempered by economic and geopolitical uncertainty, and the lingering effects of a long and snowy winter. However, activity began to pick up in recent weeks, says real estate company Royal LePage.
According to the Royal LePage House Price Survey and Market Forecast released on Thursday, the aggregate price of a home in Canada decreased 2.0 per cent year over year to $812,900 in the first quarter of 2026. On a quarter-over-quarter basis, however, the national aggregate home price remained relatively flat, increasing just 0.7 per cent.
Royal LePage is forecasting that the aggregate price of a home in Canada will increase 1.0 per cent in the fourth quarter of 2026, compared to the same quarter last year.
“In a typical spring, Canada’s housing market would already be gaining momentum, but persistently low consumer confidence remains a drag on activity – especially in our most expensive markets,” said Phil Soper, president and CEO, Royal LePage. “That hesitation is being driven by uncertainty beyond our borders. The inflationary impact of America’s war with Iran is pushing energy prices higher, with ripple effects across the broader economy, while ongoing trade negotiations ahead of the CUSMA review are adding to concerns about economic stability and job security. For many Canadians, the headlines are hard to ignore.”
Phil Soper
That sentiment can be seen in a Bank of Canada survey conducted in the fourth quarter of 2025, where Canadians were asked when they believe Canada–U.S. trade tensions had – or will have – the greatest impact on the economy and inflation. Half of respondents (50%) indicated that the most significant effects are still to come, while 27 per cent believe the worst has already passed, said the report.
“Three factors figure prominently in today’s sluggish market: hesitant first-time buyers, a return to sell-before-buy behaviour, and limited inventory in several key markets,” added Soper. “First-time buyers are the engine of the housing market, and when they pause, it ripples through every segment. Move-up buyers are also taking a more measured approach, often choosing to sell before committing to their next purchase; a behaviour we haven’t seen in years. In some regions, however, the issue isn’t demand – it’s supply.
“What’s clear is that many Canadians still intend to move. Our sales professionals, working with buyers and sellers every day, are approaching the spring and summer markets with cautious optimism.”
According to the central bank, nearly one third (29%) of Canadians said they were likely to move within the next 12 months, up from 22 per cent from a year earlier. Similarly, 20 per cent of homeowners said they were likely to sell their home within the next year, up from 14 per cent, said Royal LePage.
The Royal LePage National House Price Composite is compiled from proprietary property data nationally and regionally in 65 of the nation’s largest real estate markets. When broken out by housing type, the national median price of a single-family detached home decreased 1.3 per cent year over year to $857,300, while the median price of a condominium decreased 3.4 per cent to $577,600. On a quarter-over-quarter basis, the median price of a single-family detached home and a condominium increased modestly by 1.0 per cent and 0.4 per cent, respectively. Price data, which includes both resale and new build, is provided by RPS Real Property Solutions, a leading Canadian real estate valuation company, it said.
“Despite ongoing uncertainty, the underlying fundamentals of Canada’s housing market remain sound. For buyers, the environment has improved meaningfully. Competition has eased, interest rates have stabilized, and in many parts of the country prices have levelled off – with declines in our most expensive markets, Toronto and Vancouver, as the price gap with more affordable cities continues to narrow,” added Soper.
Alena Darmel photo
“National trends may dominate the headlines, but regional realities are what define market conditions on the ground.”
In the first quarter, the aggregate price of a home decreased 4.7 per in the Greater Toronto Area and 4.5 per cent in Greater Vancouver.
“Because of their size, softness in British Columbia and southern Ontario has an outsized impact on national averages,” said Soper. “Meanwhile, strong demand in a much more affordable Quebec market has allowed the province’s major cities to lead in both activity and price growth. On the Prairies, sales have slowed somewhat, yet home values continue to rise modestly, reflecting ongoing supply constraints. Atlantic Canada’s economy has been bolstered by a surge in Newfoundland’s energy sector and a recovery in Nova Scotia’s exports. While sales volumes have moderated, low inventory and a continued stream of interprovincial migrants seeking affordability have fuelled continued, modest home price appreciation.”
Interest rate trajectory uncertain as inflation risks reappear
Rising energy costs, driven by the escalating conflict in Iran, have introduced renewed uncertainty into the interest rate outlook, which may lead to a shift in market activity. With inflation currently sitting within the Bank of Canada’s target range, and unemployment ticking up in recent months (6.7% in February and March),4 the overnight lending rate has remained on hold at 2.25 per cent since last October. However, the risk of inflation reaccelerating has brought the possibility of future rate hikes back into focus, said Royal LePage.
“With inflation pressures resurfacing, the Bank of Canada has no room to lower interest rates further – and the next move could be upward,” said Soper. “For buyers planning to enter the market this year, securing a mortgage pre-approval sooner rather than later is a prudent step, particularly as rate holds have a limited shelf life. As that reality sets in, we expect more buyers to come off the sidelines through the spring and summer months.”
New construction industry receives boost from government spending
Canada’s new construction sector has faced sustained headwinds in recent years, driven by subdued investor demand in the condominium market, the rising cost of labour and materials, elevated borrowing rates and cuts to immigration. While housing starts increased six per cent year over year in 2025,5 much of that growth was driven by an increase in purpose-built rental construction. According to the Canada Mortgage and Housing Corporation (CMHC), the number of rental units under construction in 2025 reached nearly double the 10-year average, with record levels reported in Calgary, Edmonton, Ottawa, Halifax and Montreal, noted Royal LePage.
In March, applications opened for the First-Time Home Buyers’ GST/HST Rebate, allowing eligible buyers to recover up to 100 per cent of the federal sales tax on qualifying new construction homes, up to a maximum of $50,000.6 The Ontario government has taken it a step further, agreeing to match the federal incentive by crediting the provincial portion of HST, meaning first-time buyers can save up to a total $130,000. In addition, the two governments announced the Canada–Ontario Partnership to Build, a cost-shared investment of close to $9 billion over the next decade to cut development costs and boost housing development, shared Royal LePage.
“For years, Royal LePage has been clear: reducing development costs and cutting unnecessary red tape are essential to improving housing affordability,” said Soper. “Canada’s housing shortage is the result of years of underbuilding, and the only way to close the demand-supply gap is to get more shovels in the ground. This won’t happen if the cost of building remains unsustainable.
“The new federal-provincial government-led initiatives are a meaningful step toward getting projects moving again. But we must stay focused on outcomes. Building more housing – and, critically, building the right types of homes that Canadians can grow into – is essential to the long-term health of both the housing market and the broader economy.”
Mario Toneguzzi
Mario Toneguzzi is Managing Editor of Canada’s Entrepreneur. He has more than 40 years of experience as a daily newspaper writer, columnist, and editor. He was named in 2021 and 2024 as one of the top business journalists in the world by PR News. He was also named by RETHINK to its global list of Top Retail Experts 2024, 2025 and 2026.
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