Four years ago, Canada’s major housing markets were struggling to keep up to buyers’ demands, due to the lowest mortgage rates in years.
But housing markets are much like rollercoasters, heading up one minute, down the next minute.
From the highs of 2022, markets went through the lows of 2025 and remain subdued, despite signs of stabilization in consumer confidence, according to a new report from RBC Economics that looks at the country’s major markets.
“Demographic headwinds combined with elevated inventories are expected to keep prices under pressure through spring,” said the report’s author, Rachel Battaglia, adding supply and demand dynamics put markets into buyers’ territory.
Battaglia's report focuses on the four major markets.
Calgary
Record-breaking new home construction has kept supply high, contributing to a 6.4% drop in sales in February from January led by weakness in higher-density homes such as apartments.
“We estimate new listings fell by a similar 7% month-over-month seasonally adjusted, extending a moderation trend that began in mid-2025 except the 8.6% increase between January and December,” said Battaglia. “Active listings have retreated from peak levels observed last year, but continue to handcuff the market, sitting 16.4% above a year ago, sustaining downward pressure on prices.”
A record-high number of residential units under construction, particularly apartments, will keep supply elevated through the spring.
Vancouver
Sales increased an estimated 3.1% in February from January, but the gain lacks momentum.
“The market hasn’t recorded three consecutive months of gains since mid-2025,” said Battaglia. “Volatility, including months of considerable deterioration, keeps resales significantly depressed from longer-term averages, signalling ongoing weakness rather than genuine recovery.”
New listings were down 16.3% in February from January, bringing the sales-to-new listings ratio to over 30% after dipping to its lowest since 2008.
“The drop in new listings, however, did little for overall inventory,” says Battaglia. “Elevated stock persists, keeping leverage with buyers and prices on a downtrend, with Greater Vancouver’s MLS HPI benchmark falling 6.8% year-over-year, showing six months of increasingly sharp price declines.”
Toronto
“Toronto’s housing market continued to deteriorate in February,” said Battaglia. “Sales declined 4.9% month-over-month seasonally adjusted, following an outsized 9.9% slide in January.”
“With five consecutive months of declining transactions, the underlying trend remains unambiguously downward.”
“A steep 11.5% month-over-month drop in new listings appears to be an anomaly in a market that’s still flush with inventory,” added Battaglia. “Active listings remain elevated despite early signs of moderating since the end of 2025 peaks.”
Toronto’s MLS Composite Home Price Index fell another 7.9% year-over-year in nearly two uninterrupted years of straight declines.
“Slowing international immigration combined with net outflows to other regions and provinces will continue weighing on demand ahead, likely keeping prices under pressure this spring," said Battaglia.
Montreal
Soft sales in February (down 1.2% from January) maintained balanced market conditions in Montreal after January’s exceptional 22% surge in new listings tipped the market into equilibrium for the first time in more than a year.
“New listings inched higher by 1.3% seasonally adjusted in February, a notable deceleration from last month’s one-time influx,” said Battaglia. “Montreal remains one of two major Canadian markets showing prices consistently elevated from a year ago. The median single-family home price gained 7% year-over-year, in line with recent months.”
“Relatively low inventory continues to underpin price resilience. Seller leverage will likely need to fall further before prices see meaningful erosion.”