Canada's housing market recovery remains fragile heading into the fall, with home sales losing momentum in several major markets and prices continuing to decline in parts of the country, according to a new report from RBC Economics.
The report, published Nov. 6, says early October figures show limited improvement in housing activity across much of Canada, despite seasonally adjusted sales increases in several markets. Calgary, Saskatoon, Winnipeg and Montreal recorded further slowdowns, while uncertainty surrounding trade relations with the United States, rising long-term interest rates and lower immigration continued to weigh on market activity.
RBC assistant chief economist Robert Hogue said the market remains on track for a gradual recovery, although conditions vary considerably across regions. The bank expects improving affordability and a resilient economy to eventually bring more buyers back into the market, but anticipates an uneven recovery.
Housing activity remains uneven across Canada
The report points to modest improvements in some markets in October, with a majority of local real estate boards reporting seasonally adjusted sales increases compared with September. Vancouver, the Fraser Valley, Edmonton, Regina, Hamilton, Toronto and Ottawa were among the markets recording gains.
However, sales levels generally remained below those recorded a year earlier, with some exceptions in the Prairie provinces. Calgary, Saskatoon, Winnipeg and Montreal experienced further softening in activity during the month.
RBC also identified signs that the risk of oversupply is diminishing in several markets. Inventory levels continued to gradually decline in Vancouver, the Fraser Valley, Toronto and Hamilton, where listings had previously become abundant.
By contrast, inventory continued to increase in Montreal, Quebec City and Ottawa, although those markets were starting from relatively low supply levels.
The changing balance between supply and demand is also affecting prices. RBC said the adjustment is slowing the pace of price declines in Vancouver, the Fraser Valley, Toronto and Hamilton while moderating price increases in Saskatchewan, Manitoba, Montreal and Quebec City.
Toronto market makes limited progress
Toronto's housing market recorded modest improvements in October, with home resales increasing 1.2 per cent and the MLS Home Price Index rising 0.1 per cent compared with September.
However, both measures remained substantially below year-ago levels. Sales activity was down 7.9 per cent, while home values were 4.3 per cent lower.
RBC said the recovery that began gaining traction earlier in the year has weakened since August, with renewed trade concerns, higher long-term interest rates and slower population growth contributing to the loss of momentum.
One positive development has been declining inventory. Active listings were down 10 per cent from a year earlier in October, partly because fewer sellers entered the market. RBC said further reductions in inventory will be necessary for home values to stabilize.
Condominium apartments continue to account for nearly one-third of Toronto-area listings, adding downward pressure to prices. The condo price index declined 7.3 per cent from a year earlier, compared with a 4.4 per cent decrease for the single-detached home index.
Montreal faces weakening demand and rising inventory
Montreal's housing market showed further signs of slowing in October, as both buyers and sellers pulled back amid the provincial election.
RBC estimates that new listings declined seven per cent on a seasonally adjusted basis from September and were 2.7 per cent below year-ago levels. That marked the first annual decline in new listings since December 2025, breaking a period of strong seller activity earlier in the year.
Home resales also fell for a fifth consecutive month, reaching their lowest level since July 2024. Overall market activity is now down 20 per cent from its post-pandemic peak at the end of 2024.
Inventory has continued to build, with homes for sale reaching their highest level since 2019, an increase of 18 per cent from a year earlier. The additional supply has helped ease previously tight market conditions and reduced upward pressure on prices.
Condominium prices were nearly unchanged over the past year, increasing just 0.3 per cent, while single-family home prices rose 1.3 per cent.
RBC expects affordability pressures, slower population growth and higher long-term interest rates to continue limiting housing demand in the Montreal market.
Vancouver sees modest sales improvement
Vancouver's housing market remains weak, with October resales almost 30 per cent below pre-pandemic levels and prices declining 5.2 per cent from a year earlier.
Nevertheless, transactions increased an estimated 2.5 per cent on a seasonally adjusted basis from September. RBC said the improvement came despite distractions from local and provincial elections and rising interest rates.
The bank expects continued price declines to gradually encourage buyers who have been waiting on the sidelines to return. However, affordability improvements have not yet been sufficient to attract many prospective purchasers, particularly amid ongoing economic uncertainty.
Active listings have declined for six consecutive months but remain close to a decade high. RBC expects abundant inventory and competition among sellers to keep downward pressure on home values in the near term, providing some additional affordability relief.
Calgary market shows signs of stabilization
Calgary's housing market showed further signs of stabilization in October, although sales activity remained quieter than a year earlier.
Resales declined an estimated four per cent on a seasonally adjusted basis from September, reversing a similar increase recorded the previous month. Despite the recent slowdown, activity remained historically strong.
Home prices have largely levelled off, with the composite MLS Home Price Index down just 0.4 per cent from a year earlier.
Inventory has also stopped building as new listings moderated during the first 10 months of the year, helping maintain a balance between supply and demand.
RBC expects relatively stable conditions to continue in Calgary. Near-record levels of homebuilding are expected to bring additional supply to the market, while a relatively robust economy and population growth are anticipated to support demand.
The bank's broader outlook remains positive despite the current challenges, with improving affordability and economic resilience expected to gradually unlock pent-up housing demand across Canada.
The report was authored by Robert Hogue, RBC's assistant chief economist responsible for analysis and forecasts on the Canadian housing market and provincial economies.