RBC Warns Canadian Real Estate Slump Will Deepen as Trade War Worsens

Canada’s housing market is continuing to deteriorate as trade war pressures stall buyer confidence and flood the market with new listings. RBC Economics is warning that no near-term rebound is expected, with April data already revealing falling sales and surging inventory across nearly all major Canadian cities.

According to RBC, the sharpest declines are being seen in Southern Ontario and British Columbia, where affordability challenges are most severe. RBC assistant chief economist Robert Hogue says buyer demand has weakened significantly while sellers are increasingly under pressure to offload properties. This has tilted bargaining power in favor of buyers in key markets like Toronto, Vancouver, the Fraser Valley and other parts of Southern Ontario.

While Canada avoided new US tariffs last month, the bank says uncertainty surrounding the broader trade war is keeping buyers on the sidelines. Hogue warns that without stability, there is little chance for a market turnaround in the near future.

Toronto has taken a significant hit. April home sales were among the weakest in three decades outside of the 2020 lockdown period. The city’s benchmark home price dropped 0.7 percent from March to April and has fallen 4.4 percent since December, now sitting at $1.07 million. RBC notes a material correction is already underway as sellers compete in a market with little demand.

Vancouver is also showing signs of accelerated losses. Inventory continues to rise while sales remain near a two-year low. Prices are down 1.8 percent compared to last year and RBC expects buyers to push for further price reductions in the coming months.

Montreal has been more stable but is not immune. Home sales fell 12 percent earlier in the year and listings are slowly rising. Prices remain positive for now but RBC predicts slower growth as supply outweighs demand.

Calgary, once resilient, is now experiencing its first annual price drop since 2020. Sales have dropped to a five-year low and inventory is rising. RBC expects continued mild price declines as the market rebalances.

While lower prices and higher inventory may seem like good news for buyers, most remain cautious. RBC concludes that until trade relations stabilize and economic confidence returns, Canada’s housing market will remain under pressure and tilted in favor of buyers.