Canada’s housing market is on the mend, but not in lockstep. Home resales are climbing nationwide, yet price trends continue to split along regional lines.
National resales rose for the third consecutive month in June. However, overall, prices remained lower, with national declines largely driven by weaker conditions in Ontario and British Columbia, according to Robert Hogue, assistant chief economist at RBC.
Hogue says regional differences in market performance have become more pronounced. Markets in the Prairies, Quebec and Atlantic Canada are experiencing tighter supply and demand conditions, while several areas in Ontario and B.C. are facing elevated inventory, affordability challenges and worsening job prospects.
More sales activity, but prices are tempered
Nationally, home resales increased by 2.8 per cent in June from May, and by 3.5 per cent from a year ago.
“This reversed part of the drop in activity from earlier in the year when the trade war hammered confidence,” said Hogue, noting gains in key markets included Toronto (up 8.1 per cent from May), Vancouver (2.8 per cent), Edmonton (3 per cent) and Montreal (1.8 per cent).
However, the recovery has yet to stem the decline in house prices across the country.
The national composite MLS Home Price Index (HPI) edged 0.2% lower in June from May—marking a seventh consecutive drop.
Diverging regional trends
Price declines were mainly concentrated in Southern Ontario and B.C., where “sellers fiercely competed amid a historically high number of homes for sale, while buyers faced stretched affordability conditions,” said Hogue.
The MLS HPI fell again from May to June in Toronto (-0.9 per cent), Guelph (-2.5 per cent), Niagara region (-1.5 per cent), London (-1.2 per cent), Windsor (-0.8 per cent), Cambridge (-0.4 per cent), Fraser Valley (-1 per cent) and Vancouver (-0.1 per cent).
“These markets have seen some of the most significant weakening over the past year as supply-demand conditions shift heavily into the buyer’s favour.”
Property values remain more resilient in the Prairies (Regina, Saskatoon, and Winnipeg are up nearly 8 per cent year-over-year), Quebec (Montreal 7.3 per cent, Quebec City 16 per cent), and Atlantic Canada (Fredericton 11 per cent, Saint John 13 per cent, Halifax 4 per cent, and St. John’s 12 per cent).
“The picture is rebalancing in Calgary and Edmonton. Homebuying leveled off this year—but is still at solid levels—and prices are easing amid growing supply,” said Hogue.
