EN 
Key trends we’ve been tracking in Canada’s housing market in recent months were on full display in August.
Sales of existing homes continued to recover, reaching their highest level this year. A more ample inventory of homes for sale sustained stronger competition between sellers, while prices drifted lower—but masked divergences across the country.
A regional split persists despite home resales generally turning up since spring.
On one end, Ontario and British Columbia are challenged by decade-high inventory. In the other, supply-demand conditions are balanced or tight in parts of the Prairies, Quebec and Atlantic Canada.
National trends: Sales growth and price dips
Home resales across Canada rose 1.1% in August from July, reflecting improving buyer confidence, the impact of lower interest rates from the Bank of Canada over the past year, increased choice, and price drops.
However, the increase in sales has slowed by two-thirds compared to the prior three months, signalling a sustained recovery that’s not heating up.
We think this moderation has to do with affordability challenges that persist in many parts of the country, particularly, in high-priced markets. It prevents further unlocking of pent-up demand.
Nationally, inventory remained elevated, especially in Ontario and B.C., where the buildup of listings has exerted downward pressure on home prices.
Inventory in these provinces have shown early signs of stabilizing, but sellers continue to face heightened competition, leading to a buyer’s market in many cities including Toronto and Vancouver.
The national composite home price index edged lower in August for the eighth time in the past nine months—falling 0.1% from July.
It’s important to note the annual change (-3.4% in August) has been stable in the past five months, suggesting prices aren’t in a downward spiral.
Regional divergences persist
Ontario and B.C. remain the focal points of the national housing narrative. Elevated inventory levels in both provinces continue to weigh on property values, but the pace of price declines has slowed as inventory stabilizes.
In Ontario, major urban centers like Toronto are seeing a gradual recovery in sales, but price growth remains elusive due to significant supply—especially in condos.
Similarly, in B.C., markets such as Vancouver are grappling with sluggish prices as buyers remain cautious amid ample choice.
In contrast, housing markets in the Prairies, Quebec, and parts of Atlantic Canada are showing more balanced, if at times tight, conditions. These regions are seeing relatively low—albeit rising—inventory, and stronger affordability metrics supporting modest price gains in several local markets.
Cities such as St. John’s, Halifax, Fredericton, Quebec City, Montreal, Ottawa, Regina, Saskatoon, and Edmonton have sustained demand with prices reflecting a firmer supply-demand balance compared to counterparts in Ontario and B.C.
Further subdued recovery ahead
We expect lower interest rates will play a pivotal role in supporting demand growth through the remainder of this year into next, particularly among first-time buyers. But, we see their impact dampened by lingering economic uncertainties and affordability constraints.
Ownership costs, while easing in parts of the country, remain well above pre-pandemic levels, limiting the pool of potential buyers.
Additionally, federal immigration cuts are beginning to affect housing demand, particularly, in the rental and condo segments of urban markets like Toronto and Vancouver, where investor activity remains subdued.
On the supply side, elevated inventory in Ontario and B.C. are poised to weigh further on home prices. These provinces have seen stabilizing listings lately, but the current abundance of supply continues to tilt the markets in buyers’ favour, delaying any meaningful recovery in prices.
Download the Report
Robert Hogue is the Assistant Chief Economist responsible for providing analysis and forecasts on the Canadian housing market and provincial economies.
This article is intended as general information only and is not to be relied upon as constituting legal, financial or other professional advice. The reader is solely liable for any use of the information contained in this document and Royal Bank of Canada (“RBC”) nor any of its affiliates nor any of their respective directors, officers, employees or agents shall be held responsible for any direct or indirect damages arising from the use of this document by the reader. A professional advisor should be consulted regarding your specific situation. Information presented is believed to be factual and up-to-date but we do not guarantee its accuracy and it should not be regarded as a complete analysis of the subjects discussed. All expressions of opinion reflect the judgment of the authors as of the date of publication and are subject to change. No endorsement of any third parties or their advice, opinions, information, products or services is expressly given or implied by Royal Bank of Canada or any of its affiliates.
This document may contain forward-looking statements within the meaning of certain securities laws, which are subject to RBC’s caution regarding forward-looking statements. ESG (including climate) metrics, data and other information contained on this website are or may be based on assumptions, estimates and judgements. For cautionary statements relating to the information on this website, refer to the “Caution regarding forward-looking statements” and the “Important notice regarding this document” sections in our latest climate report or sustainability report, available at: https://www.rbc.com/our-impact/sustainability-reporting/index.html. Except as required by law, none of RBC nor any of its affiliates undertake to update any information in this document.