Canada’s housing market is beginning to move toward recovery, but RBC Economics says the turnaround has come too late to prevent home sales and prices from declining this year.

In its mid-year housing outlook released this week, RBC said home resales have been improving since April, inventory has levelled off and prices are either stabilizing or declining at a slower pace.

The bank expects the recovery to gain traction as affordability improves in some markets, employment prospects brighten and buyers who have spent years on the sidelines begin to return.

 Still, RBC assistant chief economist Robert Hogue cautioned that the recovery is unlikely to be quick or consistent across the country.

“Even in the best of cases, we think the recovery will be irregular with two steps forward followed by a step back, and regions progressing and regressing at the same time,” Hogue wrote.

 Sales, prices expected to fall in 2026

 RBC forecasts home resales will fall 3.6 per cent to 453,200 units in 2026, while its benchmark price index is expected to decline 2.3 per cent to $794,200.

The picture is expected to improve in 2027, when RBC forecasts sales will rise 6.7 per cent to 483,600 units and the benchmark value will increase 0.8 per cent to $800,700.

Even then, RBC expects sales to remain well below pre-pandemic levels and home values only slightly above their cyclical low.

 ‘Hundreds of thousands’ on the sidelines?

 A major factor in RBC’s outlook is the number of Canadians who delayed buying as ownership costs climbed.

“We think there could be hundreds of thousands of Canadians who put plans to buy a home on hold in the past several years due to sharp increases in ownership costs,” Hogue wrote.

That includes renters who have remained in rental housing longer than preferred and homeowners who postponed plans to upsize or downsize.

RBC estimates more than 400,000 Canadian households may not have been formed since 2019. The bank believes unlocking some of that delayed demand could provide significant support to the housing market.

Prospective buyers may also be in a stronger position to act, with Canadians saving at a rate near a 25-year high and employment among people aged 25 to 34 above its historical average.

RBC expects this pent-up demand to outweigh weaker homebuying demand stemming from slower population growth and immigration cuts.

Interest rates have likely bottomed

Improved affordability in some of Canada’s most expensive markets should also bring more buyers back, RBC said. Ownership costs remain high, however, and are a key reason the bank does not expect a sharp rebound.

Further relief from interest rates is also unlikely.

“We believe they are as low as they will get this cycle,” Hogue wrote.

RBC expects long-term rates to rise modestly through the end of 2027 and the Bank of Canada to hold its policy rate through the end of 2026 before beginning to raise rates next year.

Improving economy could rebuild confidence

Better economic conditions could provide another boost.

Low confidence has weighed on prospective buyers amid falling home values, affordability challenges, a soft economy and concerns about employment. RBC expects economic growth to continue through the end of 2027 and labour market slack to disappear by next spring.

Stabilizing home prices could also encourage buyers who have been reluctant to purchase while values were falling. As transactions increase and inventory is absorbed, RBC expects buyers could begin to feel more urgency to enter the market.

RBC cautioned, however, that its forecast faces several risks, including further trade tensions with the United States, geopolitical conflict, deeper effects from immigration cuts and persistent affordability challenges.

The housing market has already experienced what RBC described as four “false starts” since 2023, when periods of improvement were interrupted by outside economic events.

Ontario and B.C. expected to emerge from slumps

Ontario and British Columbia are expected to see some of the strongest sales growth next year as improved affordability helps bring sidelined buyers back.

RBC forecasts Ontario home sales will rise 8.2 per cent in 2027 after declining 0.5 per cent this year. B.C. sales are expected to climb 7.8 per cent following a 4.6 per cent decline in 2026.

Home values are forecast to increase 0.7 per cent in Ontario and 0.5 per cent in B.C. next year.

The condo market could take longer to recover. RBC said high inventory in the Toronto and Vancouver areas, combined with weak investor demand, could keep condo prices falling into 2027.

 Price growth to cool in resilient markets

 Markets that have held up better through the downturn are expected to lose some momentum as population growth slows and inventory increases.

Price growth is forecast to slow in 2027 to 2.5 per cent in Saskatchewan, 1.9 per cent in Manitoba, 1.2 per cent in Quebec, 0.9 per cent in New Brunswick and 1.3 per cent in Newfoundland and Labrador.

Nova Scotia and Prince Edward Island are expected to see prices increase 1.1 per cent and 0.3 per cent, respectively, after declines this year.

Alberta is expected to remain relatively strong, with RBC forecasting sales growth of 7.1 per cent and a 1.8 per cent increase in home values in 2027.

National home sales edged up 0.5% month-over-month in July, according to the Canadian Real Estate Association's latest data — the fourth consecutive monthly gain and, per CREA, a near-replica of what happened in June.

Listings fell and prices held steady as the market continued its drift towards balance.

Actual (not seasonally adjusted) activity in July still landed 5.3% below where it stood a year earlier. New listings slipped 1.6% month-over-month, the third straight monthly decline, tightening the national sales-to-new listings ratio to 51.3% — close to the long-term average of 54.7%, and comfortably inside the 45%-65% range CREA considers balanced.

"At the national level, July's housing data was a carbon copy of the June numbers, with home sales edging up a little further, listings down, and prices remaining stable," said Shaun Cathcart, CREA's senior economist. He pointed to the real story sitting underneath those topline figures: markets across the Prairies, Quebec, and the East Coast have been steadily cooling out of seller's-market territory over the past year, and more recently, the same shift has shown up in B.C.'s Lower Mainland and Ontario's Greater Golden Horseshoe — both of which have moved from buyers' or borderline-buyers' conditions back into balance.

There were 205,388 properties listed for sale across Canadian MLS Systems at the end of July, up just 0.6% from a year earlier and 1.5% above the long-term seasonal average. Inventory has been holding close to that average for over a year now. Months of inventory came in at 4.7 nationally — the lowest reading so far in 2026, and just under the long-term average of 5 months. (For context, CREA defines a seller's market as anything below 3.6 months of inventory, and a buyer's market as anything above 6.4.)

Saskatchewan, New Brunswick, and Newfoundland and Labrador remain the exceptions, still sitting in borderline seller's-market territory. Ontario, meanwhile, has come a long way: after spending the first four months of 2026 in buyer's-market conditions, its months-of-inventory reading in July was only about half a standard deviation above average.

On price, the National Composite MLS Home Price Index ticked up 0.1% from June to July — the first month-over-month increase in the index since November 2024. It's still down 3.3% year-over-year, but that annual decline has been shrinking steadily since January, and July's reading marks the smallest year-over-year drop since October 2025. The non-seasonally adjusted national average home price landed at $674,819 in July, up 0.2% from the same month last year.

"The ongoing shift towards a more normal balance between supply and demand in so many markets across Canada is good news for buyers, whether that means not having to worry about your new home falling in value, or not feeling pressured to make a decision due to competing offers," said Garry Bhaura, CREA's chair, adding that moderating conditions should keep drawing buyers off the sidelines going forward.

District of North Vancouver council has adopted a new zoning bylaw that simplifies the process for building new single-family homes and makes some significant changes to their form.

Perhaps the biggest shift is removing the exemption of basements from new homes’ total allowable square footage and compensating with higher height limits of up to 38 feet or three storeys.

Broadly speaking, council is looking to make houses of the future more livable, environmentally friendly and cheaper to build.

In addition to being the most costly and carbon-intensive parts of a home’s construction, basements also disrupt the natural water table and kill tree root systems leading to more flooding. They’re also where secondary suites are most likely to be located, putting renters in dark, damp quarters.

Garages will also lose their exemption from floor space allowances and the bylaw increases the maximum size of coach houses.

Importantly, the new zoning will apply to almost all of the 20,000 or so single-family properties in the district, replacing a patchwork of rules for different neighbourhoods.

At a public hearing in June, council heard from supporters as well as residents who worried the scope of the changes was too large with taller homes being hindrances to privacy and sunlight. Several said the public hadn’t been adequately consulted.

Coun. Betty Forbes, who voted against the bylaw at third reading on July 13, said council had moved too quickly without considering how the zoning would affect the properties of today’s residents.

“I’m worried that this is just going to destroy neighbourhoods in the short run, maybe long run. It’s going to remove the character. And I would rather have seen us still keep the neighbourhood-by-neighbourhood mentality,” she said.

Coun. Lisa Muri also said council didn’t have a solid enough understand of the bylaw’s implications and predicted worse outcomes for stormwater management.

“We’re going to take our knocks when those are realized,” she said.

For others, the changes don’t go far enough.

“Personally, I would have preferred bylaws that prohibited basements, given the environmental harms of basements with all of the concrete used and the encroachments on the water table,” said Coun. Jim Hanson.” Having said that, I believe these are a step in the right direction.”

Coun. Herman Mah acknowledged the tradeoffs that come with the new zoning but he expressed hope the streamlined process would make new homes more affordable.

“We have listened and heard the community’s feedback. I think staff had to balance many perspectives from the community, the desired environmental outcomes and consider the goals of this council. I think they did a very good job,” he said. “Some may feel different and it may not be perfect, but it’s good and we need to move forward.”

Mayor Mike Little said the biggest benefit will be cleaning up the “great big spaghetti mess” of regulations across the district’s single-family zones that had been the source of conflicts with the planning department.

But with construction costs for houses around $500-per square foot on top of land costs, Little said nothing in the bylaw is going to make single-family neighbourhoods affordable again.

“If you want affordability, it’s going to be in town centres properly supported by transit and properly built with purpose-built rental plans and condominium strata plans that can produce units at about half the dollar-per-square foot rate than you can see when you’re building single-family homes,” he said.

Demand for all home types in Metro Vancouver* increased to start the summer, with home sales up nearly ten per cent year-over-year in June.

The Greater Vancouver REALTORS® (GVR) reports that residential sales in the region totalled 2,390 in June 2026, a 9.6 per cent increase from the 2,181 sales recorded in June 2025. This was 12.4 per cent below the 10-year seasonal average (2,728).

“June saw a pattern of broad gains in home sales across all home types relative to the same time last year, which has been a rare occurrence in recent years,” said Andrew Lis, GVR chief economist and vice-president data analytics. “June’s data could be an early sign of a shift in the market. In recent years, sales trends have usually been mixed across home types, which is typical of a sideways trending market. But with all housing types posting gains in June, the data indicate demand may be returning to the market more broadly.”

There were 5,938 detached, attached and apartment properties newly listed for sale on the Multiple Listing Service® (MLS®) in Metro Vancouver in June 2026. This represents a six per cent decrease compared to the 6,315 properties listed in June 2025. This was 5.9 per cent above the 10-year seasonal average (5,609).

The total number of properties currently listed for sale on the MLS® system in Metro Vancouver is 17,017, a 3.1 per cent decrease compared to June 2025 (17,561). This is 30.2 per cent above the 10-year seasonal average (13,070).

Across all detached, attached and apartment property types, the sales-to-active listings ratio for June 2026 is 14.6 per cent. By property type, the ratio is 12 per cent for detached homes, 17.8 per cent for attached, and 15.5 per cent for apartments.

Analysis of the historical data suggests downward pressure on home prices occurs when the ratio dips below 12 per cent for a sustained period, while home prices often experience upward pressure when it surpasses 20 per cent over several months.

“Despite signs that demand is slowly returning to the market, prices haven’t moved much in recent months as the inventory of homes for sale has been big enough to absorb the increased demand,” Lis said. “Prices typically trend upwards when demand rises and inventory declines. With recent data revealing a slower pace of new listings coming to market, standing inventory is no longer climbing, and may be showing early signs of reversing. It’s still too early to call, but if the current pattern of rising demand and slower new listings continues, we may see a sustained downtrend in inventory over the coming months.”

The MLS® Home Price Index composite benchmark price for all residential properties in Metro Vancouver is currently $1,099,100. This represents a 6 per cent decrease over June 2025 and a 0.1 per cent decrease compared to May 2026.

Sales of detached homes in June 2026 reached 747, a 13.7 per cent increase from the 657 detached sales recorded in June 2025. The benchmark price for a detached home is $1,842,900. This represents a 7.1 per cent decrease from June 2025 and a 0.3 per cent decrease compared to May 2026.

Sales of apartment homes reached 1,103 in June 2026, a 6.1 per cent increase compared to the 1,040 sales in June 2025. The benchmark price of an apartment home is $695,200. This represents a 7.1 per cent decrease from June 2025 and a 0.4 per cent decrease compared to May 2026.

Attached home sales in June 2026 totalled 527, a 11.4 per cent increase compared to the 473 sales in June 2025. The benchmark price of a townhouse is $1,046,200. This represents a 5 per cent decrease from June 2025 and a 0.2 per cent decrease compared to May 2026.

Download GVR's June 2026 MLS® Residential Market Report.