In the middle of the fall buying season, Canada’s housing market is in a precarious position, with conditions varying greatly from region to region, each facing its own unique economic challenges.
That’s according to a report released on Tuesday by RBC Economics.
It found that renewed pressure is being felt in markets across the country as trade tensions between Canada and the U.S. ramped back up last month, but some places appear to be handling it better than others.
“Diverging trends across the country reflect different states of confidence, affordability, pent-up demand, demographics, job markets and market inventory,” Robert Hogue, RBC Economics’ assistant chief economist and report author, wrote.
“Even macroeconomic factors like interest rates and immigration policy see their impact shaped by the local context.”
In September, most local real estate boards reported drops in home resales, the report noted, including in the Ontario markets of Hamilton, Kitchener-Waterloo, Toronto and Ottawa, as well as in Vancouver and Montreal.
“Many have also shown easing home values — a continuing trend in Vancouver and the Fraser Valley where prices have steadily fallen since early 2025,” wrote Hogue.
Other areas saw price stabilization in September, the report noted, including Edmonton due to “faster rates of depreciation earlier.”
Toronto stumbles as Montreal ups supply
“It didn’t take long for the tentative recovery to go off course in the Toronto area,” Hogue wrote, referring to a gentle market rally in Canada’s largest city that began in the spring and lasted though August.
“September confirmed the new direction with resales and the benchmark price losing another step down 5.2 per cent and 0.5 per cent month-over month, respectively,” he said.
Hogue said that for the roughly five-month recovery period to have continued, consumer confidence would have needed to keep improving, but recent escalations in the U.S.-Canada trade war and long-term interest rate concerns “put buyers on the defensive.”
Meanwhile, in Montreal, growing inventory has limited home price growth, according to Hogue.
“Inventory is now up 20 per cent from a year ago, propelled by the strongest influx of sellers in six years amid calmer resales,” he wrote. “The process of rebalancing supply and demand continues to dampen home value appreciation.”
Vancouver slumps, Calgary holds steady
On Canada’s West Coast, home prices in Vancouver remain “squarely in correction mode,” Hogue said, arguing there were no indications in September that the market’s prolonged slump will end any time soon.
Despite price declines, buyers still haven’t come off the sidelines in meaningful numbers as affordability concerns persist.
“Further depreciation will likely be necessary to draw in more buyers,” wrote Hogue.
“And with inventory remaining abundant — active listings are still near a decade high — and seller competition fierce, we think this is in the cards for the rest of this year and possibly into 2027.”
In Alberta’s largest market, it was a different story in September, Hogue said.
“Calgary’s state has changed little this year. Home resales remained generally stable and historically robust despite hovering below a year ago,” he wrote.
“Inventory largely stayed on last year’s track, keeping supply and demand balanced. Prices have also stabilized close to 2025.”
However, conditions differed greatly depending on housing type. Single-detached homes saw a 4.4 per cent increase in resales and a 1 per cent price drop compared to 2025, Hogue said.
“This contrasted with material declines of 14.3 per cent and 8.3 per cent, respectively, for condo apartments,” he wrote.
At the national level, Hogue said RBC Economics expects some pent-up housing demand to be unlocked in the months ahead, as long as affordability improves and Canada’s economy continues to weather the U.S. trade-war storm.
“But,” he said, “the road ahead is likely to be bumpy and uneven across markets.”
