RBC: Confidence Slowly Returning to Canada’s Housing Markets as Sales Rebound in Key Cities

Canada’s housing market is showing early signs of recovery, with home sales momentum building in several regions, according to the latest market update from RBC Economics. While prices in affordability-challenged areas like Toronto and Vancouver remain under pressure, increased sales activity suggests buyer confidence is gradually returning.

Prices Still Falling in High-Inventory Markets

RBC reports that Toronto, Vancouver, and other Southern Ontario and Lower Mainland markets continued to see price declines in July 2025 as inventory reached historically high levels. Buyers in these regions remain in a strong negotiating position due to stretched affordability and ample supply.

However, rising resale activity, particularly in Toronto, is helping to rebalance supply and demand, which could ease downward price pressure over time.

Regional Housing Market Highlights – July 2025

Toronto: Market Turning a Corner

Sales: 6,100 homes sold in July – up 13% from June and 10.9% year-over-year.
Trend: Fourth consecutive monthly sales increase.
Prices: MLS Home Price Index down 0.2% from June, 5.4% year-over-year.
Condo Market: Down 8.1% year-over-year amid high supply and cooling rents.
Outlook: Prices expected to continue falling in the short term, but affordability is slowly improving.

Montreal: Prices Rising Despite Stalled Sales

Sales Activity: Relatively flat since February 2025 but still at a healthy pre-pandemic pace.
Supply: Historically low inventory, with new listings declining in two of the last three months.
Prices: Single-family homes up 6.8% year-over-year; condos up 3.4%.
Outlook: Continued modest price growth unless affordability weakens further.

Vancouver: Early Stages of Recovery

Sales: Estimated up 10% from June, marking the second straight monthly increase.
Supply: Active listings at their highest in over a decade.
Prices: Down 2.7% year-over-year; declines seen across all housing types.
Outlook: Price pressure may ease if balance continues to improve, but severe affordability challenges will limit gains.

Calgary: New Supply Shaping the Market

Construction: 70% increase in newly completed homes this year.
Inventory: Rising from historically low levels but still not excessive.
Prices: Down 3.9% year-over-year, compared to a 4.5% annual gain at the end of 2024.
Sales: Estimated 2% increase from June.
Outlook: Short-lived price declines expected as supply-demand conditions remain balanced.

National Market Outlook

RBC expects a broad-based housing market recovery to resume later this year as confidence grows, with diverging price trends across regions eventually narrowing.

Prairies, Quebec, and Atlantic Canada remain comparatively stronger due to tight supply-demand conditions.
Southern Ontario and British Columbia face ongoing price softness until inventory levels drop or affordability improves.

References:

Confidence is slowly improving in Canada’s housing markets – RBC

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