After a slow year for real estate in Canada, with some experts describing the spring housing market as “dead on arrival,” a new report suggests some markets are showing signs of life.
A report by the Royal Bank of Canada released Monday said local real estate boards have indicated that home resales picked up in some Canadian markets in May.
This was largely due to de-escalation of parts of the U.S. trade war on Canada, the report said.
“The de-escalation of tariffs has taken centre stage since May, alleviating some of the worst fears about the potential economic fallout even though recent doubling of steel and aluminum tariffs increases risks in some communities. We expect to get a clearer view in the coming months,” RBC economist Robert Hogue said in the report.
Penelope Graham, mortgage expert at Ratehub.ca, said tariffs have affected buyer confidence but “cracks of hope” have begun to emerge.
“From a short-term perspective, sales activity has started to pick up. This corresponds with the cracks of hope emerging in the trade scenario,” she said.
Anne-Elise Cugliari Allegritti, spokesperson for Royal LePage, said, “All in all, I think confidence is returning, at least for some Canadians. That’s translated into the housing market a bit but in very, very small spurts.”
Graham warned that the volatility has not entirely disappeared.
“There’s still plenty of downside risks for the real estate market. If we continue to see declines in the jobs market, home sales will likely stay subdued, unless interest rates are cut dramatically,” she said.
Which markets are picking up?
The RBC report said the real estate markets in Toronto, Ottawa, Calgary, Edmonton, Fraser Valley, Saskatoon and Regina all showed some signs of life.
The report said that while U.S. President Donald Trump’s trade war had “paralyzed” the housing market in Toronto, home resales picked up 8.4 per cent from April to May.
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However, home prices in Toronto continue to remain low, down 4.5 per cent compared to this time last year.
Calgary and Edmonton, too, saw housing activity pick up.
“The trade war likely caused some buyers to pause in recent months, but its cooling impact on demand in Calgary may have been limited — or even short-lived,” Hogue said, adding that housing activity picked up eight per cent from April to May in Calgary.
Quebec markets have been bucking national housing trends, Allegritti said.
“The Quebec markets really stand out this year, in not only Greater Montreal but even in Quebec City and some of the other smaller markets in the province,” she said.
Median prices for single-family homes and condo apartments in Montreal were up 8.6 per cent and 4.3 per cent, respectively, in May from a year ago — a touch slower than in April, the RBC report said.
It added that in many markets, demand now looks sturdy.
“Prairie markets such as Edmonton, Saskatoon, Regina, and some in Quebec including Quebec City and the Atlantic region like St. John’s, have held up so far — albeit not entirely unscathed from trade-induced anxiety,” the report said.
The ultra-luxury real estate market is also showing solid demand, international realty firm Sotheby’s said.
According to Sotheby’s, five properties worth over $10 million were sold in the Greater Toronto Area in the first three months of 2025.
While markets in Toronto and the Fraser Valley are picking up, sellers in other parts of Ontario and British Columbia are struggling.
“It should also be noted that some hard-hit tariffed industries, such as manufacturing, are concentrated in these southern Ontario markets,” Graham said.
Sellers in Vancouver are being forced to accept lower bids, the report said, as buyers seem to be in no urgency to buy.
“There remains little urgency for potential buyers to make a move in this still-fraught economic environment. Time is on their side with buying options increasing by the day and prices drifting lower,” the report said.
What should buyers and sellers do?
Despite the uptick in activity, market conditions remain favorable for anyone looking to buy a home this summer.
“I don’t have high expectations for the summer. That’s a typically quiet time for the housing market across the country,” Allegritti said.
“We will probably see a pick up in the fall, which is typically a busier part time of the year in the housing market,” she said.
Buyers can expect higher inventory, more choice and better ability to bargain for a deal, Graham said.
“There is an opportunity to buy a property at a lower price, and lower interest rates mean buyers will qualify for larger mortgage amounts. Buyers also have more leverage in softer markets and can ask for conditions, such as upon financing or inspection, that further benefit them,” she said.
For sellers, however, the market remains tricky.
“It’s important to have realistic expectations when listing in a down market and to price your property accordingly. An agent who understands your neighbourhood and comparable sales, and who knows how to market your property effectively, can be an important ally,” Graham said.