Canada’s Housing Market: Big Cities Cool While Smaller Regions Heat Up

Canada’s housing market in the first half of 2025 has shown two clear patterns: In the country’s priciest cities, Toronto and Vancouver, buyers are moving more slowly. In contrast, many smaller and more affordable regions, from Quebec City to communities in the Prairies and Atlantic Canada, are seeing steady demand and rising home values, according to the latest Royal LePage® Home Price Update and Market Forecast. 

These trends reflect how local price trends, inventory levels and buyer confidence shape each market differently. Notably, the national aggregate home price rose 2.1% year over year in Q1 2025, while the Greater Toronto Area (GTA) saw a 2.7% decline over the same period.

Slower Activity in Major Cities

In the greater regions of Toronto and Vancouver, higher home prices and concerns over economic instability have made buyers cautious. Although more homes are coming onto the market – new listings in the GTA increased by 14% in May 2025 compared to last year – sellers generally hold firm on their asking prices. As a result, sales are taking longer and price changes have been moderate. For example, the aggregate home price in Greater Vancouver was down just 0.7% in Q1 over the same period last year. This careful approach by both buyers and sellers has created a calm, balanced spring market in these regions.

Strong Demand in More Affordable Regions

Areas where homes are more affordable continue to attract buyers. Low supply in places like Quebec City, where prices jumped 17.0% year over year in the first quarter of 2025, and in many Atlantic communities means that available inventory often gets absorbed soon after listing. With tight market conditions, prices are continuing on an upward trajectory, with home values in the Greater Montreal Area also seeing a robust 7.9% gain over last year.

The Role of Consumer Confidence

How people feel about current economic conditions has a tangible impact on housing market trends. A recent survey (conducted by Burson on behalf of Royal LePage) found that 49% of Canadians report feeling confident in the national economy, while 43% remain hesitant. In regions where confidence is highest – Quebec (65%) – buyers tend to feel more secure and are willing to act. Conversely, in markets where hesitation prevails, both buyers and sellers prefer to wait for a clearer picture. This split in overall consumer confidence helps explain why some regions’ housing markets are more active than others. 

Looking Ahead

Most experts expect home prices in Canada overall will continue to increase moderately through the end of 2025. Royal LePage forecasts a 5.0% increase in the national aggregate home price in Q4 2025 compared to Q4 of last year, reflecting a slight downward revision in the provinces of Ontario and British Columbia. Major urban centres may lag behind if buyers remain cautious, while more affordable markets should continue to see steady gains. As economic conditions stabilize and interest rates hold or fall, confidence may improve, bringing more balanced activity across all regions.

How RLP InvestorsEdge™ Agents Can Help

For real estate investors, navigating these varied markets can be challenging. RLP InvestorsEdge experts receive specialized training in investment analysis, market cycles and risk management through an in-depth Masterclass Series developed by Broker’s Playbook™, equipping them with advanced skills and knowledge to navigate evolving markets. RLP InvestorsEdge is a residential real estate investment platform that provides investors with the insights and guidance needed to make informed decisions. Royal LePage is an industry leader, committed to providing critical Canadian real estate market insights. Investors seeking opportunities in high-potential secondary markets and those looking for solid long-term returns in established cities can benefit from the RLP InvestorsEdge advantage, with dedicated agents to help position their portfolios strategically.