Navneet Vashisht

CANADA HOUSING MARKET: EXISTING HOME SALES INCREASED IN APRIL, BUT TOO SOON TO SHOUT ‘RECOVERY’

Housing sales increased nationally in April after five months of consecutive declines. But both indicators of market conditions we report suggest still-soft conditions nationally. The MLS HPI for all markets continued to decline in April.

The number of housing sales (in units) increased 0.7% (sa) from March to April, its first monthly rise since October 2025. Sales increased in 17 of the 31 markets we track from March to April, with the strongest increases posted in Barrie (18.8%), St. Catharines (18.2%) and Charlottetown (PEI; 16.6%). National sales declined -4% (nsa) over the 12-month period ending in April 2026. 

In April, national new listings posted a 4.1% (sa) monthly increase with above ¾ of the local markets we track contributing to this rise, with at least 10% increases observed for Quebec City (12.4%), Kitchener-Waterloo (10.5%), Ottawa (10.2%) and Peterborough (10%). New listings also edged up 0.2% (nsa) nationally over the 12-month period ending with April.

With new listings increasing at a faster pace than sales from March to April, the national sales-to new listings ratio (SNLR) was pushed down to 45.6% (sa). This figure is close to our estimated lower bound for the balanced conditions’ range (estimated at 44.7%), and very close to its lowest print since early 2009, when Canada was in a recession. Nearly ¾ of the monitored local markets have seen their SLNR declined from March to April.

The number of home sales recorded over Canadian MLS® Systems was up 0.7% on a month-over-month basis in April 2026.

“While home sales were up only modestly from March to April, the small increase reflected a slow start to the month with a stronger handoff into May, alongside falling days on market and stabilizing prices,” said Shaun Cathcart, Senior Economist with the Canadian Real Estate Association (CREA). “This latest bout of global economic uncertainty and higher mortgage rates means the previously expected rebound in housing markets this year will continue to be muted, but it does not mean there will be no upward momentum at all.”

April Highlights:

• National home sales edged up 0.7% month-over-month.
• Actual (not seasonally adjusted) monthly activity came in 4% below April 2025.
• The number of newly listed properties jumped 4.1% on a month-over-month basis.
• The MLS® Home Price Index (HPI) edged down 0.1% month-over-month and was
• down 4.2% on a year-over-year basis.
• The actual (not seasonally adjusted) national average sale price was up 2.2% on a
• year-over-year basis in April 2026.

Canada’s housing starts made meaningful gains in 2025. Record rental construction and more missing middle housing added important new supply, building on the momentum highlighted in the Fall 2025 Housing Supply Report.

At the same time, ownership-oriented construction weakened overall. Short-term imbalances continued in several markets. Rising unsold inventories suggest today’s supply may not align well with buyers’ needs, while tighter financing conditions and project cancellations threaten future supply.

This report focuses on both sides of that story: where Canada is succeeding in expanding housing options and where further progress is needed to ensure long-term supply and affordability.

Highlights

• Canada’s housing starts rose 6% in 2025, driven by record rental and expanding missing middle construction. Building timelines improved. High completion levels added important supply, especially in Vancouver, Calgary and Edmonton.
• Major vulnerabilities lie underneath this progress. Condominium presales collapsed, unsold inventory surged and financial conditions tightened. These pressures threaten the future pipeline of ownership-oriented housing supply, particularly in Toronto and Vancouver.
• Slower population growth, cautious buyers and elevated construction costs shaped supply decisions, pushing developers towards smaller apartments while limiting family-sized, ground-oriented homes.
• Looking ahead, near‑term supply imbalances are expected to ease as new supply is absorbed, helping affordability in the long run.

CANADA HOUSING MARKET: STILL WAITING FOR A NATIONAL HOUSING MARKET RECOVERY

National housing sales and the MLS Home Price Index continued to decline in March, reflecting continued weakness in market conditions.

The number of national housing sales posted its fifth consecutive monthly decline last month, edging down by -0.1% (sa figures) from its February level, while it declined by -2.3% (nsa) since March 2025. From February to March, sales declined in 17 of the 31 local markets we track. National new listings also edged down by -0.2% (sa) between February and March and posted a -4.9% (nsa) decline since March 2025.

With almost identical monthly declines (in %) in both sales and new listings, the national sales-to-new listings ratio stayed constant at 47.8% (sa) from February to March, still in the lower half of the estimated balanced conditions range. This indicator of market conditions has hovered in this lower-half range since December 2024, and also frequently since Spring of 2022. From February to March and according to this indicator, market conditions eased in 14 of the local markets we monitor and tightened in 17 of them. It also suggests 14 of these local markets were balanced in March and the same number were favouring buyers, all in B.C. and Ontario. Only 3 markets—Regina, Saskatoon and St. John’s (NL)—were assessed as sellers’ favourable.

The other indicator of market conditions we report—months of inventory—stayed unchanged at 5.0 from February to March, very close to its long-term pre-pandemic average of 5.2, hence also suggesting balanced conditions. But despite being essentially balanced at national level, this indicator continues to mask significant divergences across provinces with British Columbia and Ontario showing figures above their long-term average and the other provinces showing below average figures.

The national MLS House Price Index (HPI) declined -0.4% (sa) from February to March, continuing its downward trend that started in the second half of 2023. As in many previous months, all unit types contributed to both the monthly and 12-month declines in the national MLS HPI. Over the 12-month period ending in March of this year, this price index declined -4.7% (nsa). Its trend profile reflects the weakening market conditions mainly coming initially from the lagged effects from the rise in interest rates until Fall of 2023, and subsequently from slower population growth and the rise in global trade and geopolitical tensions since early 2025.

The Bank of Canada today held its target for the overnight rate at 2.25%, with the Bank Rate at 2.5% and the deposit rate at 2.20%.

The evolving conflict in the Middle East is causing heightened volatility and US trade policy continues to reshape global trade patterns. Both are ongoing sources of uncertainty. The Bank’s April outlook assumes tariffs remain unchanged and the global benchmark price of oil declines to US$75 per barrel by mid 2027.

The Iran war has led to sharply higher energy prices and transportation disruptions, diminishing growth prospects in oil-importing countries and boosting inflation worldwide. In the United States, growth is still expected to be solid over the projection horizon, boosted by AI-related investment and consumption growth. China’s economy is being supported by robust exports. In the euro area, higher prices for oil and natural gas will weigh on economic activity.

Financial conditions have been volatile, reflecting daily developments in the Middle East and shifting market expectations for inflation and interest rates. Bond yields are modestly higher since January while equity markets, which weakened sharply at the outset of the war, have recovered. Since the start of the war, the US dollar has appreciated against most major currencies. The Canada-US exchange rate has been relatively stable.

Overall, the global economy is expected to grow by about 3% in 2026, 2027 and 2028. Projections for inflation over the next year are revised up because of the jump in energy prices.

• Weaker-than-expected performances in 2025Q4 and especially 2026Q1 have prompted a steep downgrade to our forecasts for 2026 annual average Canadian home resales and price growth. While severe weather in Central and Atlantic Canada weighed on activity early in the year, weakness was also evident in B.C., where conditions were more temperate. Sales are likely to take most of the year to recoup first quarter losses, as housing remains constrained by a subdued economy, heightened uncertainty, and ongoing cost of living pressures.
• Interest rates are expected to be a largely neutral factor for the outlook in 2026, with the Bank of Canada likely to remain on hold and no major movements expected in bond yields (which help determine fixed mortgage rates).
• Canada’s population declined last year for the first time since Confederation, driven by losses in Ontario and B.C.. Softer rental demand and falling rents are discouraging investor activity in both provinces. Alberta stands out, with the strongest population growth nationally, supported by immigration. Interprovincial migrants continue to flow into the province, bolstering ownership demand.

The number of home sales recorded over Canadian MLS® Systems was virtually unchanged (-0.1%) on a month-over-month basis in March 2026.

“Home sales activity remained at lower levels in March, as rising global economic uncertainty, along with a mid-month jump in fixed mortgage rates tied to incoming higher inflation, piled on to an already shaky economic start to the year,” said Shaun Cathcart, CREA’s Senior Economist. “2026 is still expected to see a modest amount of upward momentum in sales and a stabilization in prices as some pent-up first-time buyer demand enters the market, but the forecast for the year has had to be revised downward. The timing of higher mortgage rates, along with the perception they may be temporary, could keep would-be buyers away at the most active time of year – April, May, and June – as they wait for rates to come back down.”

March Highlights:

• National home sales were almost unchanged (-0.1%) month-over-month.
• Actual (not seasonally adjusted) monthly activity came in 2.3% below March 2025.
• The number of newly listed properties edged down 0.2% on a month-over-month basis.
• The MLS® Home Price Index (HPI) fell 0.4% month-over-month and was down 4.7% on a year-over-year basis.
• The actual (not seasonally adjusted) national average sale price was down 0.8% on a year-over-year basis in March 2026.

The provincial budget season is winding down, with just PEI and Newfoundland and Labrador still to table their FY26/27 documents. Here are five themes:

Deep deficits persist: A few provinces are slipping deeper into the red, while a few are moving to slightly shallower shortfalls. As a group, the chunky $40 billion deficit for the fiscal year just ending (FY25/26) will persist in FY26/27, with a combined shortfall of $46.7 billion expected. That’s a manageable 1.4% of GDP, but topped only twice in the past two decades: at the depth of the pandemic, and the depth of the financial crisis.

Certainly uncertain: This year’s budget season acknowledged the wild uncertainty in macroeconomic conditions. But, unlike last year, where every province seemingly took a different approach to setting an economic outlook (assume tariffs, no tariffs, publish different scenarios, etc.), this year was largely based on a ‘normal’ baseline economic outlook and a status quo on trade policy. With that in mind, the group overall has embedded more than $10 billion of contingencies into the FY26/27 fiscal plan, leaving some room for upside if the economy holds up.

Revenue gusher (for some): The two big oil-producing provinces locked in their budgets ahead of the conflict in Iran and associated surge in oil prices. Now, budget assumptions look wildly conservative. Alberta assumed $60.50 for WTI this fiscal year and Saskatchewan assumed $59.80 (Newfoundland & Labrador still to be tabled). At current levels for WTI, the light-heavy differential and the loonie, we could see upwards of $20 billion of revenue upside in those two provinces alone, swinging both well back into surplus.

Debt climbing: The combined provincial net debt-to-GDP ratio is looking to push 32% in FY26/27, which would be a fourth consecutive increase from the post-pandemic lows. Recall that there was meaningful fiscal consolidation during that period when inflation and nominal growth were ripping. Interestingly, debt ratios don’t look any worse than they did a year ago thanks to hefty upward nominal GDP revisions, but the provinces are clearly still open to borrowing. This year’s long-term borrowing program is on pace to run at around $140 billion, just a shade lower than seen over the prior two years and the pandemic high. Indeed, while the combined provincial deficit is running at $47 billion this fiscal year, combined net debt is going to surge by $80 billion, or 2.5% of GDP, which is more reflective of underlying finances. Combined with the federal government, this truer fiscal gap in Canada is closer to 4.5% of GDP.

Policy steady: There were no show-stopping policy changes at the provincial level this budget season. While there were no major tax changes, some provinces nudged taxes higher (e.g., B.C. broadening the PST base and lifting income taxes), while others pushed through some targeted policy (e.g., Ontario expanding the HST rebate on new homes to all buyers). In general, the provinces continue to focus heavily on infrastructure, still catching up to past population growth (hence the hefty borrowing program), while program spending looks to run strong at more than 4% overall. The federal government continues to do more of the stimulus leg work, and that could continue with any new measures announced in the upcoming federal fiscal update.