Toronto and Vancouver slump masks stronger housing markets across Canada

 It’s no secret that Canada’s spring housing market is off to a slow start as a host of factors – economic uncertainty, rising interest rates, affordability challenges and more – continue to weigh down the national outlook.

But while the two largest markets, Toronto and Vancouver, are facing a gloomy few months ahead, they could be overshadowing other cities where prospects are markedly better.

Home sales and prices are expected to continue sliding in the Greater Toronto Area (GTA) and Greater Vancouver Area (GVA) between now and the end of 2026, with their spiralling condo sectors likely to drive much of that decline.

Still, a new forecast by Royal LePage shows 10 of 12 major metropolitan cities are expected to see average prices tick up by January, with only Toronto and Vancouver in the red on price growth.

Some of those projected increases are noteworthy. Halifax, Winnipeg, and Regina are all expected to see average prices rise by 4%, with the Greater Montreal Area slated for 5% growth and Quebec City poised for a bumper 12% jump in prices.

Edmonton, Calgary, and Ottawa are expected to see milder growth (2.0%, 1.5%, and 2.0% respectively) with declines in Toronto and Vancouver (-4.5% and -3.5%) dragging the national average down to a modest 1.0%.

Buyers ‘looking beyond geopolitical issues’ in less pricey markets: Soper

For Royal LePage’s president and chief executive officer Phil Soper (pictured top), those contrasting fortunes highlight the absence of a truly “national” Canadian housing market and the radical divergence at play between different cities.

And while there’s been plenty of discussion in recent weeks about homebuyers stepping to the sidelines because of the economic uncertainty caused by the war in Iran, Soper told Canadian Mortgage Professional he believes those geopolitical concerns are less of a factor for homebuyers in more affordable markets outside the notoriously overpriced Toronto and Vancouver regions.

In less pricey northern Ontario markets, for instance, Soper said recent conversations with regional brokerages showed the main challenges facing homebuyers are the same as before the outbreak of the trade war last year and the Iran conflict in February: handling multiple-offer situations, improving housing inventory, and “lighting a fire” under policymakers to boost construction.

“In parts of the country where home prices are moderate, people are looking beyond the geopolitical issues – America’s war on Iran, the on-again, off-again trade threats from President Trump,” he said.

“They’re looking beyond that and saying, ‘All right, let’s get into this market. Mortgage rates are reasonable, home prices have been flat, but they’re likely to start rising again, so I should get into the market because my job’s solid.’ And we’re seeing that right across the country.”

The rosy forecast for Quebec City was spurred in part by a spectacular first quarter for the city’s housing market, where aggregate prices jumped by 10.7% in the opening three months of the year.

Single-family detached home prices hit $508,500, rising by 11.1%, a trend that Soper said reflected the lack of supply and rising demand for properties in that city.

Toronto and Vancouver still much pricier than elsewhere – but the gap is narrowing

Another trend that jumps off the page from the company’s latest market report: the price gap between the Toronto and Vancouver markets and the rest of the country is slowly narrowing thanks to falling values in those two cities and climbing prices elsewhere.

In 2022, the gap between aggregate home prices in Toronto and Montreal was around $800,000, Soper said. By the fourth quarter of last year it had dropped to $440,000 – and it fell further in 2026’s first quarter, slipping to $375,000.

Even when prices were sky-high in Toronto and Vancouver – for instance, in the period of rampant appreciation during the COVID-19 pandemic – many buyers still felt the time was right to jump into the market amid lower interest rates and higher savings trends.

But while prices have fallen in those cities, they’re still higher than in other Canadian markets and the economic uncertainty generated by the Iran war and tariff turmoil tends to be a bigger factor for buyers there than elsewhere, according to Soper.

“When people are super incented and sure that they need to get into the market, they’ll look beyond affordability challenges and leap in,” he said. “When they’re uncertain anyway and they feel that prices are stretched and too high, they’ll easily use it as an excuse to sit tight for another month or two, another quarter. And that’s what we’ve been seeing in Toronto and Vancouver for sure.”

CMP

We hope you are finding our Blog informative and enjoyable to read while keeping you up to date with the ever changing real estate market. 

Please feel free to contact me via Direct/Text or e-mail at any time and my team will be pleased to assist you, family members and friends with all your real estate needs. Referrals are always welcome and rewarded!

CREA downgrades Canada home sales, price forecast for 2026

Canadian home sales in March 2026 barely budged, but the mood in the mortgage market clearly darkened.

The Canadian Real Estate Association (CREA) has downgraded its forecast for 2026 sales amid a stormy economic climate and continuing uncertainty over the housing market.

The assciation reported that transactions through MLS systems dipped just 0.1% from February, with actual activity 2.3% below a year earlier and prices still drifting lower.

A spike in oil prices late in the month stoked inflation fears, pushed up bond yields and triggered a mid‑March jump in fixed mortgage rates, just as the critical spring market approached.

CREA’s senior economist Shaun Cathcart said that combination has weighed on already fragile sentiment.

“Home sales activity remained at lower levels in March, as rising global economic uncertainty, along with a mid‑month jump in fixed mortgage rates tied to incoming higher inflation, piled on to an already shaky economic start to the year,” Cathcart said.

“2026 is still expected to see a modest amount of upward momentum in sales and a stabilization in prices as some pent‑up first‑time buyer demand enters the market, but the forecast for the year has had to be revised downward.”

Forecast cut as global shocks hit confidence

CREA now expects national home sales to rise just 1% in 2026, to about 475,000 transactions. That's down from the 5.1% growth it projected in January.

The national average price was forecast to climb 1.5% to roughly $689,000 – about $10,000 lower than CREA’s previous call – with almost no growth in British Columbia, Alberta and Ontario and modest gains elsewhere. 

Cathcart linked the downgrade directly to geopolitical turmoil.

“Unfortunately, as it pertains to the forecast, we’ve had to change that and lower it because of the situation in the Middle East and the oil shock,” he told CBC News.

He added that buyers are also watching how the U.S. and Israel’s war with Iran would filter through to global growth and interest rates, saying “these massive global disasters, really, … continue to unfold.”

Balanced market, but buyers stayed cautious

On the ground, market balance stayed relatively stable. New listings edged down 0.2% month over month in March and sat at their lowest levels since mid‑2024, helping keep the national sales‑to‑new‑listings ratio at 47.8% – comfortably within CREA’s “balanced” range.

The National Composite MLS Home Price Index fell 0.4% from February and 4.7% year over year, while the actual national average price slipped 0.8% from March 2025 to $673,084.

“While the interest rate situation has recently changed, what could be a challenge for a buyer looking for a fixed rate mortgage may also be seen as more choice and less competition for those choosing a variable rate,” said CREA chair Garry Bhaura.

“Spring tended to be a busier time of year for the housing market, even if it may not have been quite as busy as we were expecting not so long ago. For those of you not impacted by the recent jump in mortgage rates, get working with a local REALTOR® today.”

What it meant for mortgage professionals

For brokers and lenders, the March figures reinforce a story they have already been watching: demand that exists on paper, but often not in approvals.

In 2025, external shocks – then in the form of US tariff threats – had already kept a lid on activity despite lower rates.

CMP

We hope you are finding our Blog informative and enjoyable to read while keeping you up to date with the ever changing real estate market. 

Please feel free to contact me via Direct/Text or e-mail at any time and my team will be pleased to assist you, family members and friends with all your real estate needs. Referrals are always welcome and rewarded!

Fixed vs variable mortgages: How are Canadians choosing as economic uncertainty soars?

Canadian borrowers are reassessing their mortgage choices as fixed rates climb on the back of recent bond market turbulence, prompting a fresh look at the trade-offs between fixed and variable options.

Fixed mortgage rates have been pushed higher as bond yields rise, with markets scaling back expectations for future rate cuts in both Canada and the United States. According to Ratehub, the lowest insured five-year fixed mortgage rate has risen to around 3.94%, up from 3.79% in February.

Leah Zlatkin, a licensed mortgage broker and LowestRates.ca expert, says the shifting rate environment is prompting some borrowers to reconsider where they stand.

“Most borrowers still prefer the certainty of fixed payments, especially after the sharp increases to variable rates during the Bank of Canada’s rate-hiking cycle in 2022 and 2023,” Zlatkin said. “At the same time, others are looking at the numbers and believe a variable mortgage is worth the risk given the immediate savings.”

Breaking penalties shape borrower decisions

Variable mortgages are currently available at meaningful discounts compared with many fixed options, with some borrowers securing rates close to prime minus 0.95. That pricing gap is drawing renewed interest in variable options, particularly among homeowners who plan to sell within a few years or who expect interest rates to hold steady or decline.

“In many cases, it comes down to a cost-benefit analysis,” Zlatkin said. “Some borrowers expect to sell their home within a few years, and the penalty to break a variable mortgage is typically only three months’ interest. Others believe the savings from today’s variable discount make it worth the risk compared with locking into a higher fixed rate.”

Fixed mortgages remain far more popular, with 77% of rate inquiries on at least one major comparison platform in 2025 directed toward fixed products, compared with just 8% for variable, as many borrowers continue to prioritise payment certainty, according to Ratehub.

Fixed mortgage rates are expected to rise slightly amid continued bond market volatility, driven by high government debt and various international conflicts, while variable mortgage rates are expected to remain relatively stable at least through mid-2026, according to Mortgage Sandbox.

Despite the appeal of variable discounts, Zlatkin cautioned that such products are not suitable for every borrower.

“The reality is that variable rates come with uncertainty,” she said. “Borrowers need to be comfortable with the possibility that rates could move higher again depending on how the economic environment evolves.”

CMP

We hope you are finding our Blog informative and enjoyable to read while keeping you up to date with the ever changing real estate market. 

Please feel free to contact me via Direct/Text or e-mail at any time and my team will be pleased to assist you, family members and friends with all your real estate needs. Referrals are always welcome and rewarded!

‘One thing after another’: Why lower prices aren’t causing a Canadian homebuying surge

 Home prices are slipping across plenty of Canada’s main housing markets, continuing a months-long slide and providing a welcome boost to hopeful buyers.

But sales have barely picked up, with early spring buying activity mixed – at best – as buyers remain hesitant about taking the plunge.

Vancouver, for instance, remains “stuck in a low gear” on the housing front, according to Royal Bank of Canada (RBC), while the Toronto and Montreal markets are still taking time to gather momentum.

Despite falling prices, buying a home is still no easy feat for many Canadians. Housing affordability actually worsened in 11 of 13 major markets in February, a Ratehub.ca analysis showed, and fixed interest rate hikes in recent weeks have put the squeeze on buyers.

Another factor isn’t helping: continuing buyer and consumer unease about the economic outlook, which has worsened over the past year amid the sudden arrival of US tariffs and the outbreak of war in Iran.

The US’s flurry of tariff measures against major trading partners has darkened the outlook for the Canadian economy and put plenty of crucial sectors under strain, while the conflict in the Middle East has jolted bond yields and stirred fears of an inflation upswing.

Joel Fox (pictured top), co-founder and chief operating officer of Ownright, told Canadian Mortgage Professional those elements were sapping confidence from the housing market, even if prices are declining.

“Things continue to pop up that impact the market and it’s unpredictable at this point. I think that’s kind of drained people right now and they need some more stability to really feel the confidence that it’s going to bounce back up,” he said.

“It’s just one thing after another. From a market activity standpoint, prices going down is a positive sign traditionally, because you would expect that would drive more buyers into the market. But I think there really is a confidence issue in the real estate market at this point because people have seen it really come pretty close to a grinding halt compared to what we’ve seen historically.”

Homebuyers focus on longer-term trends for certainty

While a fragile ceasefire is currently in place between the US and Iran, doubts have arisen over how long that will last – and Fox said homebuyers will likely need much more certainty on the issue before their confidence returns.

“I think it’d be a bit naïve to think that this Iran situation is resolved at all, and I think that’s kind of just built into people’s expectations,” he said. “They’re kind of numb to the day-to-day announcements and look more at trends.

“It’s certainly a positive thing that there’s a [truce], but even if this gets resolved it’s hard to imagine that something else isn’t going to come down the line that will continue to leave people feeling uncertain.”

Falling prices also dampen housing market confidence

While Toronto sales inched marginally higher in March, that was their first month-over-month increase since September – and the mortgage industry doesn’t appear convinced that marks a more lasting trend.

Fox highlighted another factor at play in the city’s housing market: with prices on a consistent slide, many buyers are likely holding off on a purchase until those declines have levelled off.

“I think a unique thing that’s happening now that we haven’t really seen in a long time is that the price decrease that’s happening is also part of the reason why buyers are still hesitant to jump in,” he said.

“If people are continually seeing that price decrease happening and the volume decrease happening, even if it’s an appealing price compared to what it was two, three or four years ago, it leaves people a little uncertain about what’s to come and afraid that they’re going to step into owning an asset that’s just going to continue to decline in value.”

CMP

We hope you are finding our Blog informative and enjoyable to read while keeping you up to date with the ever changing real estate market. 

Please feel free to contact me via Direct/Text or e-mail at any time and my team will be pleased to assist you, family members and friends with all your real estate needs. Referrals are always welcome and rewarded!

Old-economy rebound lifts Canada’s growth, buys time for mortgage market

Canadian growth at the start of 2026 turned out stronger than most economists have pencilled in, offering a rare upside surprise just as fresh geopolitical and energy shocks loomed over households and lenders.

Statistics Canada’s latest figures showed real GDP edged up 0.1% in January, with an advance estimate pointing to a 0.2% gain in February.

Douglas Porter, chief economist at BMO, called it “a pleasant surprise, for a change,” noting that the economy appeared “in somewhat better shape than anticipated heading into the turmoil.”

Porter said the real story lay in what he described as a “revenge of the old economy,” with mining and oil and gas output rising 1.2% in January and construction up 1.0% despite “all the dire headlines about residential activity.”

Even with manufacturing tumbling 1.4% month‑over‑month and 4.6% year‑over‑year on extended auto shutdowns, the goods‑producing side still managed to “pound out a 0.2% rise in January,” he said.

Services activity was largely flat as weakness in wholesale trade and transportation offset steadier categories. “Consumers were doing their thing, with retail trade up 0.8% (and a sturdy 2.7% y/y), while hotels & restaurants rose 0.7% (2.3% y/y),” Porter said, adding that “finance & insurance is another strong point at up 0.9% and 3.2% y/y.”

From a year earlier, real GDP in January was only 0.6% higher – a pace Porter characterized as the economy “just keeping its head above water,” even with support from defence spending, infrastructure programs and a 7.3% surge in data‑centre‑related activity.

Bottom line for growth and rates

In his latest outlook, Porter said the one‑two punch of stronger‑than‑expected January and February readings “sets a much better tone to Q1 than anticipated.”

BMO revised its Q1 annualized growth call up to 1.5% (from 0.8%), closer to the Bank of Canada’s January projection of 1.8%.

He cautioned, however, that the recent spike in fuel costs is likely to “weigh on consumer sentiment and take a bite out of spending in the coming months,” with growth seen ebbing to 1.0% in Q2 and about 1.0% for 2026 as a whole.

That modest trajectory broadly aligns with other recent forecasts that have kept mortgage professionals focused on a low‑growth, higher‑for‑longer environment.

Deloitte’s early‑2026 outlook, for example, pointed to a “year of two halves” with subdued momentum early on and a slightly firmer second half, while still trimming its GDP call and emphasizing trade and population‑growth risks for housing and credit demand.

The latest GDP surprise suggests that Canada entered the current oil‑price and geopolitical shock with a bit more forward motion than feared – but not enough to dramatically change the story for mortgage professionals.

For brokers, lenders and investors, early‑year resilience bought the economy time, not a boom, and the mortgage business still needs to plan for a year defined by slow growth, cautious consumers and a rate path that rewards prudence over optimism.

CMP

We hope you are finding our Blog informative and enjoyable to read while keeping you up to date with the ever changing real estate market. 

Please feel free to contact me via Direct/Text or e-mail at any time and my team will be pleased to assist you, family members and friends with all your real estate needs. Referrals are always welcome and rewarded!