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
No comments:
Post a Comment