Buyers gained ground as listings rose, but price growth remained elusive
Canada’s housing market continued its slow march toward balance in the third quarter of 2025, with home sales climbing but prices showing little momentum.
The national aggregate home price held steady year-over-year at $816,500, slipping 1.2% from the previous quarter, according to Royal LePage’s latest House Price Survey and Market Forecast.
The story was far from uniform across the country, with Montreal posting solid gains while Toronto and Vancouver saw prices slide.
“Canada’s housing market is shifting toward balance, as easing prices, rising listings and renewed rate cuts improve affordability across most regions,” said Phil Soper, president and CEO of Royal LePage.
“For the first time in years, buyers – especially in previously supply-strapped markets – have real choice and negotiating power. With confidence returning and further rate reductions expected into early 2026, we anticipate noticeably stronger activity by the spring.”
Regional divergence sharpens as buyers return
Montreal stood out as a rare bright spot, with the aggregate home price up 4.9% year-over-year to $635,000.
“The figures reflect a reality where the island of Montreal is beginning to perform better, which could be explained by the gradual return to the office and a renewed appeal for the city centre,” said Marc Lefrançois, broker at Royal LePage Tendance.
“This increase in inventory creates a particularly favourable environment for buyers.”
Despite federal and municipal employees heading back to the office, broker Chris Allard of Smart Debt Mortgages says core living remains out of reach for most workers earning $70K–$140K individually.https://t.co/AtkMEztkp1
— Canadian Mortgage Professional Magazine (@CMPmagazine) September 10, 2025
In contrast, Toronto and Vancouver saw aggregate prices fall 3.5% and 3.1%, respectively, with Toronto’s price at $1,114,900 and Vancouver at $1,195,500, as inventory swelled and buyers took their time.
“The GTA housing market remains firmly in favour of buyers,” said Shawn Zigelstein of Royal LePage Your Community Realty.
“Active listings are well up, with the influx of new listings consistently outpacing sales, providing prepared buyers with a significant advantage in both negotiating power and choice.”
Policy shifts and rate cuts shape outlook
The Bank of Canada’s September rate cut to 2.5% offered some relief to borrowers, though the impact on prices has so far been muted.
“Inflation has remained within the Bank of Canada’s target range for twenty consecutive months, a positive sign for the economy,” Soper said.
“While mortgage rates remain above their pandemic lows, the Bank’s recent rate cut is easing pressure on borrowers. Rates are once again in the threes – a level that feels supportive by the standards of the past two decades.”
Meanwhile, Ottawa’s new Build Canada Homes initiative promises 4,000 factory-built homes, but Soper warned that “4,000 homes should be seen as a catalyst, not a solution. The key to building housing at the pace Canada requires is meaningful private-sector participation.”
Cautious optimism, but no quick fixes
Royal LePage now expects the national aggregate home price to rise just 1.0% in Q4, a downward revision driven by ongoing softness in Toronto and Vancouver.
“Prices are likely to tread water in the near term, as improved affordability and lower borrowing costs draw more buyers back to the table,” Soper said.
“Finally, the return-to-office trend should renew demand in urban cores, even as lower prices in suburban and rural communities continue to attract families – just not at the scale we saw during the pandemic.”
For mortgage professionals, the RTO debate is more than a workplace issue—it’s a market signal. If remote and hybrid work remain entrenched, demand for suburban and exurban properties is likely to stay robust, while urban condo markets may continue to lag.
“A lot of those borrowers, unless they’re later on in their career, are not buying in the core because they can’t afford living in the core. So they’re going to buy in suburbia or the outskirts purely from an affordability standpoint. So I don’t think a return to work is going to make an immense difference,” Chris Allard, a broker with Smart Debt Mortgages, previously told Canadian Mortgage Professional.
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