Canadian Real Estate Slump Deepens: RBC Warns No Rebound In Sight

Canadian housing markets are taking a sharp hit as worries over global trade trouble, especially the ongoing tariff war, shake buyer confidence. RBC Economics has stated clearly that they do not expect the market to bounce back soon. Sales dropped sharply in April across all major regions, while the number of homes for sale climbed, leaving greater choice for buyers but increasing pressure on sellers.

RBC points out that the trade fight between the U.S. and Canada is making things worse. Sellers worry that buyers are waiting for clarity on tariffs before making big decisions. The most expensive regions—Southern Ontario and British Columbia—are seeing the steepest dips in activity and home prices.

In Toronto, the slump deepened in April as sales hit the lowest point in 30 years, outside the COVID lockdown period. A surge of listings overwhelmed buyers, creating the toughest balance since the early 1990s. Toronto’s MLS Home Price Index value dropped by around 0.7% from March to April, and by 4.4%—about \$49,000—since December, bringing the average home price to roughly \$1.07 million.

Vancouver’s market, which had held up better, is also giving way. Sales stayed near a two-year low, but rising inventory is dragging prices down. Over the last four months prices have fallen, and are now 1.8% below last year’s levels. RBC warns that buyers increasingly call the shots, likely pushing prices down faster in the coming months.

In Montreal, conditions are not as severe yet, but signs are emerging. Sales dropped about 12% in the first two months of the year, and though April was flat, more sellers are putting homes on the market while fewer people are buying. Prices are still rising slightly, but RBC says gains will slow as the balance shifts toward buyers.

Calgary’s housing market has finally cooled too. Sales are at a five-year low and demand has fallen for three months, while supply grows. For the first time since 2020, home prices dropped compared to a year ago. RBC forecasts more mild declines as the market settles down. Overall, RBC’s outlook is pessimistic. Even though Canada avoided new U.S. tariffs last month—which boosted confidence a bit—the bank says a meaningful rebound is unlikely while trade uncertainty continues. On the bright side for buyers, more choices and falling prices give them stronger negotiating power. But unless the tariff disputes calm down, sellers may face a tough stretch ahead.