Inventory swelled while wary buyers stayed sidelined in January
Canada’s housing market started 2026 with more product on the shelf and fewer takers – a combination that kept prices lower in many of the country’s largest cities, according to a new analysis from RBC Economics.
Economist Rachel Battaglia said supply–demand conditions “weakened further in most large Canadian markets as January unfolded,” with “potential buyers remain[ing] cautious despite elevated inventory giving them the upper hand.”
Severe winter weather and calendar quirks muddied the data, but did not change the underlying picture of a market where listings outpaced demand.
In Vancouver, January “interrupted a string of improvements over recent months,” Battaglia said, with sales plunging nearly 30% on a seasonally adjusted basis from December and the MLS HPI benchmark down 5.7% year over year.
Resales “continued to lag well below the 10-year seasonal average, while listings sit significantly above historical norms,” she said – a mix that “keeps leverage in buyers’ hands, and prices on a downtrend.”
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Toronto also remained firmly in buyer’s-market territory. Battaglia said sales in the Greater Toronto Area “contract[ed] 9.9% seasonally adjusted from December,” the fourth straight monthly decline, while new listings “picked up marginally (1.1% SA), adding to the stockpile of inventory sitting idle.”
The MLS Composite Home Price Index “remained on a downtrend through January, dropping 8% from a year ago – the 22nd consecutive decline and sharpest drop in three years,” she said.
Calgary – until recently Canada’s standout seller’s market – was not spared from price pressure. Battaglia said sales there rose 7.3% month over month, but “gains…were overshadowed by an even larger jump in new listings,” with elevated inventory driving a 4.7% annual drop in the composite benchmark and “lots of residential construction in the pipeline” suggesting supply would stay high.
RBC’s broader housing outlook already points to “a bumpy road” as elevated inventories in Ontario and B.C. kept “significant downward price pressure amid abundant inventory and fierce seller competition,” while markets in Quebec and the Prairies stayed comparatively tighter.
The Canadian Real Estate Association (CREA) and broker forecasts still call for modest national price gains in 2026, but those projections remain vulnerable to deeper trade shocks or a weaker labour market.
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