Hoping for a market uptick with summer over? It may depend on what part of the country you're in
Mortgage professionals across Canada encountered a shifting landscape in August, as regional housing markets displayed signs of recovery while price corrections and inventory surges persisted. But the outlook is varying from one location to the next, with certain major markets looking set to bounce back more swiftly than others in the months ahead.
“There was further evidence of a recovery taking hold in many housing markets across Canada in August,” RBC assistant chief economist Robert Hogue said in a new report. “But local price trends still varied considerably with declines continuing in affordability-challenged areas where inventory has piled up.”
Early numbers from real estate boards pointed to increased home sales in Vancouver, Calgary, Edmonton, and Montreal. However, Calgary and Edmonton remained below last year’s activity levels, and Toronto’s momentum paused after several months of gains.
“These developments are in line with our view that rebuilding market confidence will support a slow recovery in the second half of 2025, and set the stage for stronger demand in 2026,” Hogue said.
Inventory and affordability shaped mortgage opportunities
For mortgage brokers, the divergence in regional trends underscored the importance of local expertise. “Balanced, if sometimes tight, conditions are driving property values higher in most of the Prairies, Quebec and parts of Atlantic Canada, while high inventory is depressing values in Ontario and British Columbia,” Hogue said.
The MLS Home Price Index fell again in Toronto, Hamilton, Calgary, Edmonton, Fraser Valley, and Vancouver, with inventory surges most pronounced in Calgary and Edmonton due to strong construction.
Toronto’s market, after months of steady gains, saw resales dip 1.8% from July, seasonally adjusted, with condos remaining soft. The composite MLS HPI edged 0.1% lower to $978,100, continuing a year-long downtrend. Condo prices fell 7% year-over-year, and single-detached homes dropped 5.6%. But that's still failing to materially change the picture for many hopeful buyers. “Affordability—while improving—will remain a big issue,” Hogue said.
Montreal’s market broke from its lull, with new listings and home resales up more than 8% and 5% from July, respectively. Median prices rose 7.3% for single-family homes and 3.7% for condos compared to last year, but affordability constraints could slow further gains.
“Repeat buyers who can leverage their real estate assets are at the forefront. Consequently, Montreal’s central neighbourhoods, which are the most expensive, continue to post the strongest growth in sales, as do other affluent neighbourhoods in more peripheral areas,” Charles Brant, QPAREB’s market analysis director, previously said.
Vancouver’s recovery continued, with home resales rising close to 6% from July. “Buyers who paused their search for a home when the trade war erupted this winter are heading back into the fray,” Hogue said. Still, active listings hovered at a decade high, and the MLS HPI dropped 3.8% year-over-year.
Calgary’s market saw an estimated 8% increase in transactions from July, but the MLS HPI was down 4.1% from a year ago. “With housing construction still near a record high and likely to continue boosting supply, we think any upside potential for prices are limited in the short term,” Hogue said.
Meanwhile, overall Canadian housing starts failed to pick up pace in the first half of 2025 with contrasts emerging between key cities, according to the latest Housing Supply Report from Canada Mortgage and Housing Corporation (CMHC).
Calgary, Edmonton, Montreal, Ottawa, and Halifax saw housing starts at or near record levels, while Canada’s most expensive markets, such as Toronto and Vancouver, dragged national growth to a standstill.
