Weaker demand and rising listings push prices down in major cities like Toronto and Vancouver
Canada’s housing markets are under increasing strain as the ongoing trade war creates fresh waves of uncertainty, cooling buyer confidence and softening property prices.
Local real estate boards reported that home resales fell sharply in April compared to a year earlier, with the Fraser Valley, Vancouver, and Toronto leading the downturn. In southern Ontario, sales activity hit or neared cycle lows.
The latest MLS Home Price Index (HPI) showed further price drops in multiple regions, including Toronto, Hamilton, Kitchener-Waterloo, Cambridge, Vancouver, and the Fraser Valley. Notably, Calgary posted its first year-over-year price decline in five years.
With rising inventories and cooling demand, buyers are now gaining significant bargaining power in many markets.
“The US sparing Canada additional tariffs in April could lift some of the fog that’s been eroding market confidence and holding back activity,” RBC assistant chief economist Robert Hogue said in a commentary. “However, we don’t see a meaningful rebound as long as trade uncertainty lingers.”
Toronto’s deepening downturn
Toronto’s housing market is experiencing its sharpest downturn in decades, with April sales transactions hitting their weakest level in 30 years outside the COVID-19 lockdown period. The market continues to see a strong flow of sellers, which has swelled inventory and pushed the supply-demand balance heavily toward buyers.
Property values are undergoing a correction. Toronto’s composite MLS HPI has fallen in five of the past six months, slipping 0.7% between March and April and dropping 4.4% (about $49,000) since December, down to $1.07 million.
“We expect prices to continue falling in the near term as sellers fiercely compete to get deals done, while trade worries weigh on sentiment,” said Hogue.
Montreal: Resilient but cautious
Montreal has largely held its ground, with home resales stabilizing in recent months after a sharp early-year drop. While economic uncertainty is making its presence felt, the market has remained relatively balanced thanks to steady new listings, which have even accelerated in April.
Prices in Montreal continued to rise modestly: median prices for single-family homes and condos increased by 2.5% and 1.1%, respectively, from March, and 8.7% and 6.1% from a year ago.
However, Hogue expects the rate of price growth to slow in the coming months.
“However, we see the rate of increase slowing in the months ahead as supply-demand conditions continue to tilt in the buyer’s favour.”
Vancouver’s buyers’ market
In Vancouver, the spring market has drawn out more sellers, but buyers remain cautious, with resales sitting at a two-year low in April. The expanded inventory has given buyers more choice and greater leverage, pushing home prices lower.
Vancouver’s composite MLS HPI has dropped steadily over the past four months and is now down 1.8% year-over-year.
“We think buyers will continue to use their power to extract price concessions from sellers in the months ahead—quite possibly at an accelerating pace,” Hogue said.
Calgary’s cooling momentum
Calgary’s market, which saw strong momentum earlier this year, has lost steam as the trade war spooks potential buyers. Sales have sagged over the past three months, hitting a five-year low in April, even as housing supply rebounded from early-2024 lows, supported by active construction.
Read more: An out-of-province buyer surge in Calgary is slowing amid spiking prices
The composite MLS HPI fell below year-ago levels for the first time since 2020, down 1.4% in April. Hogue anticipates further mild price declines as Calgary’s market rebalances.
“But, shifting market conditions have significantly dialed down the heat on home prices,” he said. “We see further mild declines ahead as the re-balancing process continues.”
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