RBC Economics released a comprehensive review of Canada’s housing market that reveals a decisive seller-led recovery across key urban centers. The latest data from local real estate boards—including figures from REBGV, FVREB, CREB, RAE, TRREB, and QPAREB—highlight renewed optimism among home sellers who are strategically increasing inventory ahead of a potentially brisk spring season. This in-depth analysis explains how lower borrowing costs, anticipated cuts by the Bank of Canada, and recent mortgage insurance changes are fueling activity while trade uncertainty and the threat of U.S. tariffs keep overall price gains in check.

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Toronto: A Resurgent Market with Unprecedented Choice

Toronto’s housing landscape is demonstrating a clear recovery. Seasonally adjusted home resales jumped 10% in January following a steep 19% dip at the end of 2024—a sign that last year’s slowdown was only a temporary setback. More dramatically, new listings surged by 26% between December and January. The spike in inventory has resulted in active listings reaching levels not seen since 2009, offering buyers a significantly wider range of options and easing upward price pressure. The MLS Home Price Index (HPI) for Toronto remained unchanged from December and registered a modest 0.5% increase year-over-year, while condominium prices softened by 3.4% compared to the previous year. This dual dynamic of renewed seller activity and controlled price growth underscores the market’s gradual normalization.

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Montreal: Market Recovery Cemented by Robust Data

Montreal’s market has fully bounced back, with resale transactions now hitting an annualized seasonally adjusted rate of just over 54,000 units—levels that mirror the city’s pre-pandemic vigor. New listings climbed by 11% from December to January, even as overall inventory has shrunk slightly since mid-2024. The tightened supply has preserved a seller’s advantage in negotiations. Meanwhile, median prices have surged noticeably, with single-family homes appreciating by more than 10% year-over-year and condos gaining nearly 8%. These figures indicate that while Montreal remains a tight seller’s market, the robustness in pricing suggests continued momentum for the remainder of 2025.

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Vancouver: A Buyer-Friendly Shift Amid a Supply Gush

In Vancouver, sellers responded to the evolving market by ramping up new listings by an estimated 40% from December to January. However, this rapid influx has not been mirrored by buyer activity; home resales dropped approximately 3% over the same period, following a 2.6% decrease in the prior month. An annual rise of 33% in active listings is shifting the balance towards buyers, providing increased leverage in negotiations. Despite the supply surge, overall pricing remains stable, with the MLS HPI showing just a modest 0.5% year-over-year increase. Analysts caution that if this softened supply-demand dynamic persists, it could eventually apply downward pressure on property values in an area already known for its affordability challenges.

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Calgary: Rebalancing Through Strategic Inventory Expansion

Calgary is experiencing a thoughtful rebalancing of its housing market. Resale transactions held near pre-pandemic highs, increasing modestly by 1% between December and January. Sellers, however, have been particularly aggressive, with new listings up by 22% in January. A striking contributor to this change is the 64% year-over-year surge in new home completions seen in 2024, which has propelled inventory levels to rise by 68% compared to the previous year. As a result, the composite MLS HPI in Calgary posted a 2.8% annual gain in January—a significant deceleration from the nearly 11% gains experienced during the spring recovery of 2024. This measured pace signals that the market is moving toward a more balanced state favorable to both buyers and sellers.

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Additional Market Insights: Edmonton and Quebec City

While Toronto, Montreal, Vancouver, and Calgary take center stage, transaction activity in markets like Edmonton and Quebec City also rebounded in January. These regions reflect the broader national trend of recovery and provide additional layers of opportunity, reinforcing the overall view that Canada’s housing market remains on a sustainable recovery path barring any severe trade disruptions.

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A Cautious Outlook Amid Trade Uncertainty

RBC’s report also underscores that overall price appreciation in 2025 is likely to remain modest. With the potential for economic turbulence—exacerbated by looming U.S. tariff threats under the new administration—market participants are proceeding with caution. The influx of new listings is helping to rebuild inventories that had plummeted during the pandemic, which in turn eases bidding pressures and stabilizes pricing. Robert Hogue, Assistant Chief Economist at RBC, emphasizes that while sellers are seizing current opportunities, the market dynamics reflect a careful balancing act between renewed demand and external economic headwinds.

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Leveraging Data-Driven Insights

At Coldwell Banker Horizon Realty, we understand that detailed, data-driven insights are essential for making informed real estate decisions. Leveraging RBC’s comprehensive analysis and our local market expertise, we are uniquely positioned to help you navigate this evolving landscape—whether you’re a seller looking to capitalize on a historically favorable inventory environment or a buyer seeking increased selection and negotiating power.

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Contact us today to discuss how these trends might impact your next move and to receive tailored advice in a market where strategy and timing are everything.

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Source: RBC