Canadian Housing Market Update: June 2025

Something interesting may be happening in the Canadian housing market.

A flurry of economic threats from the U.S. encased the winter selling season in a block of icy uncertainty. But as Donald Trump’s tariff offensive sputters, it may be triggering a thaw.

Home sales were essentially flat from March to April. The lack of a drop-off during the most aggressive phase of the trade war caught our attention. In May, home sales improved further, posting a modest monthly increase of 3.6%, according to the Canadian Real Estate Association.

“It seems like this may carry over into June as well,” Valérie Paquin, CREA chair, said in a statement regarding last month’s heightened activity.

Could Canada be in the early stages of a market recovery? Not necessarily.

Factors fueling some doubt include:

Rather than a market recovery, the rise in sales may be an indication that Canadians are basing their home buying decisions on affordability and mortgage eligibility rather than the whims of the U.S. president.

This return to fundamentals may not translate to lasting increases in sales or prices, but in a time of chaos, it’s a step in the right direction.

Housing market winners and losers: May 2025

Home sales rose most notably in the following provincial markets (figures indicate year-over-year differences):

Sales experienced the largest declines in:

If you happened to read May’s housing market update (and have an unusually sharp memory), you’d notice that the provinces listed here are virtually the same as a month ago. A notable change, however, can be seen in the magnitude of the sales declines.

In April, sales in all four of those provinces were down by double-digits year-over-year. (Sales in Ontario were particularly bleak, dropping by more than 20%.) But in May, only B.C. saw sales fall by more than 10%.

The declines may not even be as concerning as they appear.

Alberta’s and Saskatchewan’s housing markets were absolutely rocking at this point last year. Prices can only rise so high, and inventoriesy deteriorate so much, before demand eventually tapers off. Considering the storm clouds hanging over the economy, those decreases could arguably be much larger.

In B.C. and Ontario, two factors are at play.

First, they’re the two most expensive real estate markets in the country. When affordability is limited by inflation and high interest rates, it’s only natural that the priciest markets slow down.

Second, those decreases are influenced by unusually stagnant condo markets in Toronto and Vancouver, which are largely driven by investors. Condos may be considered toxic investments right now, but that’s the result of high carrying costs, rising supply and lower population growth.

Weak condo sales don’t necessarily indicate an unhealthy housing market, just that one segment of it needs rebalancing after years of off-the-charts growth.

Canadian home prices in May

At the national level, where the average sale price dipped 1.8% year-over-year in May, it appears that home prices are holding steady. But local markets aren’t necessarily trending in the same direction — and that’s okay.

The following is a list of the average sale price in some of Canada’s largest cities last month, and how much they’ve changed since May 2024:

What you see here is typical when demand cools, when mortgage rates rise and especially when both happen at once: prices soften in the most expensive markets and firm up elsewhere.

Some markets are weakening, which could make things stressful if you’re trying to sell in one of them. But they’re losing steam in a predictable manner.

That’s a sign that the Canadian housing market might be bruised, but it hasn’t been broken.