National housing market showed uneven recovery in May, says RBC

Royal Bank of Canada (RBC) assistant chief economist Robert Hogue saw Canada’s housing market displaying signs of readjustment in May as transaction levels rebounded in several major cities – even as price pressures and supply-demand imbalances persisted in others.

The banking giant’s recent analysis of May housing market trends suggested that some of the slowdown observed earlier in the year has eased, but the overall landscape remains mixed.

Resale activity picked up in markets such as Toronto, Calgary, Edmonton, Ottawa, Saskatoon, and Regina, where earlier declines were partially reversed. The change comes as economic concerns tied to the trade war have started to ease, although new tariffs on steel and aluminium continue to pose risks in some communities.

In Toronto, existing home sales increased by 8.4% between April and May on a seasonally adjusted basis. Inventory levels are elevated, offering buyers a wider range of options. The high volume of available homes has continued to weigh on prices, with the MLS Home Price Index (HPI) down 4.5% from a year earlier. While the HPI edged up slightly from April, the supply-demand gap points to the possibility of further price erosion.

Vancouver remained under pressure, with resale transactions declining for the sixth consecutive month. Inventory in the city reached its highest level in 12 years, driven in part by unsold new condominium units entering the market. With sellers competing for limited buyer interest, the region’s HPI dropped 2.9% year-over-year.

In Calgary, May brought an increase in resale transactions of more than 8%, following a series of monthly declines. Population growth and higher employment levels continue to support activity, though the MLS HPI fell 2.5% annually. A steady pace of new construction has helped increase housing supply and moderate price movements.

Montreal saw relatively stable conditions. Resale volumes slipped 2% from the previous month, but remained consistent with historical averages. Prices continued to trend upward. Single-family homes posted an annual increase of 8.6%, while condo prices rose 4.3%. A gradual rise in new listings is helping to ease earlier tight supply conditions.

Southern Ontario and parts of British Columbia, including Vancouver and Fraser Valley, continued to report weaker activity. Many of these markets are operating near cyclical lows, and pricing remains under pressure. By contrast, cities in the Prairies and Atlantic Canada, including Quebec City and St. John’s, have experienced more stable performance.

While some regional markets are adjusting more quickly, national housing trends remain sensitive to evolving economic factors and policy impacts. For mortgage professionals, the shifting conditions underscore the need to monitor inventory, pricing, and local demand patterns.

CMP

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