Canada’s housing markets are faltering as trade tensions cast a long shadow over buyer confidence and economic prospects. The latest RBC Economics report from Robert Hogue reveals a steep drop in resale activity and softening home prices across many of the country’s major markets, with southern Ontario and British Columbia leading the slide.
The toll of uncertainty
The trade war, already a concern for many sectors, is now hitting closer to home—literally. April saw year-over-year resale activity tumble in markets like the Fraser Valley, Greater Vancouver, and Toronto. In fact, sales in southern Ontario reached near-cycle lows, with Toronto notching its weakest April in three decades (excluding the pandemic shutdown of 2020).
Buyers are pulling back. Sellers, meanwhile, aren’t. That growing imbalance is nudging inventories up and prices down. The composite MLS Home Price Index (HPI) fell again in April in several key regions, including Toronto, Hamilton, Kitchener-Waterloo, Vancouver, and the Fraser Valley. Calgary, which had held relatively firm until now, posted its first year-over-year price drop in five years.
“Bargaining power has shifted in the buyer’s favour in Vancouver, Fraser Valley, Toronto and other southern Ontario markets,” Hogue writes, suggesting that confidence remains fragile and the outlook murky until trade tensions ease.
Toronto: A deepening downturn
Toronto’s housing market is seeing a “material correction in property values.” Sales activity was “exceptionally soft” for a second-straight month in April, and property values are following suit. The composite HPI dropped 0.7 per cent from March and is down 4.4 per cent—about $49,000—since December. The average home price now sits at $1.07-million.
The influx of new listings is outpacing buyer demand, tipping the scales in buyers’ favour to a degree not seen since the early 1990s, according to Hogue. “We expect prices to continue falling in the near term as sellers fiercely compete to get deals done, while trade worries weigh on sentiment.”
Vancouver: Buyers gaining leverage
Buyers in the Vancouver area are steering the ship—home resales were “stable” at a two-year low in April, despite an increase in inventory. As supply grows, buyers have options—and bargaining power.
Prices are feeling the pressure. The composite HPI has declined for four straight months and is down 1.8 per cent from April 2024. Hogue predicts “buyers will continue to use their power to extract price concessions from sellers in the months ahead—quite possibly at an accelerating pace.”
Montreal: Resilient, for now
Montreal’s market, while not immune to national pressures, is holding steady for the time being. Home resales have stabilized after a sharp drop early in the year, and prices continue to climb modestly—up 2.5 per cent month-over-month for single-family homes and 1.1 per cent for condos.
That said, the tide may be shifting. With listings rising, buyers are gaining more ground. RBC expects the pace of price growth to slow in the coming months.
Calgary: Market rebalancing
Even Calgary, long a standout among Canadian markets, is showing signs of strain, Hogue says. Momentum that carried into early 2025 has faded over the last three months, with resales hitting a five-year low in April.
New construction has kept supply strong, but buyer uncertainty is undermining price growth. April marked the first year-over-year HPI decline since 2020, down 1.4 per cent. RBC expects further “ mild declines ahead as the re-balancing process continues.”
Regional bright spots?
As for other regions, “Prairie markets such as Edmonton, Saskatoon, Regina, and some in Quebec, including Quebec City and the Atlantic region like St. John’s seem to be holding up at this point,” though Hogue warns they aren’t immune to the trade war’s chill. So far, they’ve shown resilience, but sentiment remains fragile.
The U.S. decision to hold off on additional tariffs in April might offer some relief, but don’t expect a surge in housing activity just yet. RBC sees ongoing trade uncertainty as a major headwind keeping buyers on the sidelines.
