Don't expect a housing boom anytime soon, says RBC

Canada’s housing market is unlikely to see a dramatic rebound in the near future, according to Royal Bank of Canada’s latest analysis.

Robert Hogue, assistant chief economist at RBC, said the country’s housing recovery would remain “subdued” as persistent affordability challenges, economic uncertainty, and regional disparities continue to weigh on activity.

“We expect resales to continue to recover gradually in the year ahead as lower interest rates, and in some markets, lower prices, stimulate buyer demand,” Hogue said.

“However, the process is unlikely to be smooth with persisting economic uncertainty, labour market softness and affordability issues poised to create waves. September’s setback serves as a reminder that the housing market recovery remains vulnerable to external shocks and shifts in sentiment.”

Home sales fell 1.7% in September compared to August, marking the first monthly decline since April.

While some regions such as Victoria, Regina, Saskatoon, Winnipeg, Toronto, Quebec City, and Sherbrooke saw increased activity, major centres including Vancouver, Calgary, Edmonton, Kitchener-Waterloo, London, Ottawa, Gatineau, Montreal, St. John, and Halifax posted declines.

Hogue noted that “mixed regional results highlight the fragile and uneven nature of the recovery underway.”

Gradual improvement but no surge in sight

The Bank of Canada’s anticipated policy easing cycle may offer some relief to affordability-constrained buyers, particularly first-time purchasers who have been sidelined by high borrowing costs.

Still, Hogue cautioned that “the path forward for Canada’s housing market will likely be characterized by continued regional divergence and periodic volatility as economic conditions evolve and policy measures take effect.”

For now, buyers in Vancouver and Toronto enjoy more negotiating power as supply outpaces demand, putting further downward pressure on prices. In contrast, conditions in much of the Prairies, Quebec, and Atlantic Canada remain balanced or tight, supporting modest price gains.

Regional divergence persists

The report emphasized that structural differences—such as housing supply, population growth, and economic trends—are driving the divergence between markets.

“Markets with more abundant inventory continue to favour buyers, while those with constrained supply remain seller-friendly,” Hogue said.

The current market—with lower prices, reduced rates, and less competition—offers new opportunities for buyers who were previously priced out, said Kingsley Ma, area vice president at RE/MAX Canada.

“For those that are waiting for a freefall, I don’t believe that will happen. It might get a little bit softer, a couple of percent in terms of overall prices – especially smaller units. But I don’t believe there’s going to be a freefall in terms of prices," he told Canadian Mortgage Professional.

“However, if you look at the market now, it’s probably one of the best times in the last handful of years for a younger buyer to get in because now interest rates are coming down a little bit in the next couple of months, hopefully.”

CMP

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