Canada Housing Market

After being one of Canada’s hardest-hit housing markets, Ontario may finally be starting to show signs of a recovery.

A new housing market update from RBC Economics, released August 18, 2026, says there was further progress across Ontario in July, with home resales increasing in Toronto, Hamilton, Kitchener-Waterloo, London and Ottawa.

Home values also increased month-over-month in both Toronto and Ottawa.

RBC now describes “hard-hit Ontario” as initiating a recovery, with lower home prices, improving affordability and better employment prospects expected to gradually bring more buyers back into the market.

There is, however, an important catch.

Sales and benchmark home prices remain below where they were one year ago across most Ontario markets, meaning this is still an early and relatively slow recovery rather than a return to the housing boom conditions seen earlier this decade.

Ontario Home Sales Are Starting To Pick Up

One of the clearest signs of improvement is coming from resale activity.

According to RBC, home sales increased from June to July in:

• Toronto
• Hamilton
• Kitchener-Waterloo
• London
• Ottawa

RBC described the improvement as further progress for Ontario after the province experienced a lengthy housing market slowdown.

The rebound is also part of a broader national trend.

Canadian home sales increased 0.5% month-over-month in July, marking the fourth consecutive monthly increase, according to the Canadian Real Estate Association.

While a 0.5% increase may not sound dramatic, several consecutive months of rising activity are starting to provide evidence that buyers are slowly returning after spending much of the past year on the sidelines.

Toronto Is Showing Some Of The Strongest Signs Of Recovery

Toronto has been one of the most closely watched markets throughout Ontario’s downturn.

RBC’s separate August 6 analysis found that July marked the fifth consecutive month of rising home resales in the Toronto area, the longest streak of monthly sales gains in three years.

Toronto home prices also increased for a second consecutive month.

That represented the longest stretch of monthly home-value growth since the beginning of 2024, according to RBC.

RBC called the movement a potential long-awaited turning point for Toronto.

But the market still has a long way to go.

Toronto resale activity remains more than 30% below pre-pandemic levels, while the region’s MLS Home Price Index was still 4.6% lower than one year ago in July.

Toronto Condos Are Still Struggling

Not every part of the market is recovering at the same pace.

Toronto’s condominium sector remains particularly weak.

RBC reported that the GTA condo benchmark price was 7.4% lower year-over-year in July, considerably worse than the decline for the overall market.

Condo inventory also remains relatively abundant.

That means buyers looking for condos may continue to have significantly more negotiating power than buyers in other segments, even as the broader Toronto housing market starts moving closer to balance.

RBC expects excess condo supply to keep pressure on condo values for longer, even if prices in other housing categories begin to stabilize.

Ontario Housing Inventory Is Starting To Stabilize

Another major change is happening on the supply side.

For much of the past few years, Ontario accumulated a large inventory of homes for sale as buyers pulled back and more sellers entered the market.

That helped create unusually buyer-friendly conditions in many areas.

But RBC says inventory is now stabilizing and even beginning to edge lower in Ontario, helping to put a floor under home prices.

CREA is seeing the same shift.

Its July housing report says Ontario spent the first four months of 2026 in buyer’s-market conditions, but the province has since moved substantially closer to its historical balance between supply and demand.

Markets across the Greater Golden Horseshoe that had previously been buyer’s or borderline buyer’s markets have now largely shifted back into balanced territory.

That is an important change for anyone who has been waiting for Ontario’s housing correction to deepen further.

Fewer Sellers Are Listing Homes

Part of the improvement isn’t necessarily because buyers are suddenly flooding back into the market.

There are also simply fewer sellers.

Nationally, new listings declined 1.6% from June to July, marking the third consecutive monthly decline.

RBC says new listings are down meaningfully this year and that stabilizing inventory is helping housing markets become better balanced.

This matters because home prices are influenced by both sides of the equation.

Prices can stabilize not only when demand increases, but also when fewer sellers compete against each other.

That appears to be part of what is happening in Ontario right now.

Home Prices May Have Found A Bottom

RBC also believes there are growing signs that Canadian home prices may have already reached their cyclical bottom.

The national aggregate MLS Home Price Index increased month-over-month for a second time, according to RBC, marking the first back-to-back gains since early 2024.

CREA’s seasonally adjusted national benchmark increased 0.1% from June to July, marking its first monthly increase since November 2024.

Ontario is also showing some local price stabilization.

RBC says Toronto and Ottawa both recorded monthly home-value increases in July.

But that doesn’t mean Ontario prices have recovered their previous losses.

Across most of the province, both sales and benchmark prices were still lower than they were one year earlier.

Lower Prices Are Helping Ontario Affordability

One of the reasons buyers may finally be returning is simple: homes have become cheaper.

Ontario has experienced some of the largest home-price corrections in Canada over the past few years, particularly across southern Ontario.

Those declines have not suddenly made housing inexpensive, especially in the GTA.

But lower prices have reduced the amount buyers need to borrow and gradually improved affordability compared with the market’s peak.

RBC expects lower home prices and improving affordability to help unlock pent-up demand from buyers who have been waiting on the sidelines.

The bank also points to improving job prospects as another factor that could help support housing demand.

Canada’s Housing Market Is Recovering Very Slowly

Ontario isn’t operating in isolation.

Across Canada, the housing market has now recorded four consecutive monthly increases in home sales.

However, RBC cautions that the recovery is moving at a very slow pace.

National home sales were running at a seasonally adjusted annualized rate of roughly 457,500 transactions in July, which RBC says was still 12% below the 10-year average.

At the pace of improvement seen during the previous two months, RBC estimates it would take approximately two and a half years for activity to return to its 10-year average.

In other words, this isn’t shaping up to be another sudden housing boom.

RBC expects any recovery to remain gradual because interest rates are no longer falling, population growth has stalled and economic uncertainty remains elevated.

Ontario Could Be In A Different Position Than Other Provinces

One of the most interesting parts of RBC’s latest report is how Canada’s regional housing trends are starting to reverse.

Ontario was one of the weakest housing markets during the correction.

Meanwhile, markets across parts of the Prairies, Quebec and Atlantic Canada continued experiencing stronger price growth and demand.

Now those trends may be starting to converge.

RBC says some previously strong housing markets are showing signs of reaching their limits, while Ontario is beginning a recovery from a much weaker starting point.

The bank expects that trend to continue as Ontario’s lower prices and improving affordability bring more buyers back.

Is Ontario’s Housing Market Actually Recovering?

There are several signs pointing in that direction.

Home resales increased in multiple major Ontario markets in July.

Toronto has now recorded five consecutive months of improving resale activity.

Toronto and Ottawa home values increased month-over-month.

Ontario housing inventory is beginning to stabilize.

Greater Golden Horseshoe markets are moving from buyer’s-market conditions back toward balance.

And RBC now explicitly describes Ontario as initiating a recovery.

But there are also plenty of reasons to remain cautious.

Home prices remain below last year’s levels across most Ontario markets.

Toronto sales remain far below pre-pandemic activity.

Condos are still experiencing significant price declines.

And the national housing recovery itself remains slow.

So Ontario isn’t suddenly returning to the frenzy of 2021 or early 2022.

Instead, the latest numbers suggest something more subtle may be happening.

After years of declining prices, high inventory and hesitant buyers, Ontario’s housing market may finally be starting to turn a corner.

References

RBC Economics, “Slowly but surely Canada’s housing market is turning around,” August 18, 2026.
RBC’s latest monthly housing market update covering the emerging recovery in Ontario, increasing resales in Toronto, Hamilton, Kitchener-Waterloo, London and Ottawa, and rising home values in Toronto and Ottawa.
RBC Economics housing market update

RBC Economics, “Diverging trends across Canada’s housing markets in July,” August 6, 2026.
Includes RBC’s Toronto-specific analysis showing five consecutive months of resale growth, two consecutive monthly home-price gains and continued weakness in the condo sector.
RBC Economics July local housing market analysis

Canadian Real Estate Association (CREA), “Canadian Home Sales Climb Again in July,” August 18, 2026.
Includes July national sales, listing and price data, along with CREA’s assessment that Ontario and the Greater Golden Horseshoe are shifting back toward balanced market conditions.
CREA July 2026 housing market release