Canada’s Housing Market Is Finally Showing Signs of Recovery, Says RBC
Canada’s Housing Market Shows Early Signs of Recovery, RBC Says
Canada’s housing market may finally be moving toward a gradual recovery, according to a new report from RBC Economics.
Home resales have improved since April, while housing inventory has begun to stabilize and prices are showing signs of levelling off. RBC believes improving affordability and stronger employment prospects could help restore buyer confidence.
A major factor will be whether Canadians who postponed purchasing a home return to the market. Many potential buyers have delayed buying, moving to a larger property or downsizing because of rising ownership costs in recent years.
However, the recovery is not expected to happen evenly across Canada. Ontario and British Columbia may experience a slower rebound following prolonged market corrections, while stronger regional markets could see limited additional growth because of steady interest rates and slower population gains.
Condominiums may also take longer to recover. High inventory levels in Toronto and Vancouver, combined with weaker investor demand, could continue placing downward pressure on condo prices into 2027.
RBC forecasts that home resales will decline 3.6% in 2026 to approximately 453,200 transactions. The benchmark home price is expected to fall 2.3% to about $794,200.
The outlook is expected to improve in 2027, with sales projected to increase 6.7% to 483,600 units and benchmark prices rising modestly by 0.8% to approximately $800,700.
Interest rates are unlikely to provide significant additional affordability relief. RBC expects the Bank of Canada to hold rates through the remainder of 2026 before potentially raising its policy rate next year.
The recovery is still not guaranteed. Trade tensions, new tariffs and geopolitical conflicts could weaken economic confidence and delay market improvement, as similar external events have disrupted previous recovery attempts.
