Posthaste: Canada’s historic housing market meltdown may have finally hit bottom

For the first time since January 2025, the home price index didn't decline

National home sales rose 0.5 per cent in June from the month before, the third straight month of gains. New listings fell for the second straight month, narrowing the gap between buyer demand and new supply. The national composite MLS home price index was unchanged from the month before, but that in itself is good news.

For the first time in 17 months it did not decline. “Stepping back, inflation-adjusted Canadian home prices suggest the necessary froth cleaning is more or less done,” said Kavcic. There was a lot of froth to clear.

Canadian home prices soared around the pandemic when borrowing costs were low and demand high, but since the market peak in 2022 have dropped about 20 per cent. Robert Hogue, assistant chief economist at Royal Bank of Canada, said stabilizing inventory, especially in the hardest-hit provinces Ontario and British Columbia, where listings reached decades highs last year, is paving the way for ending the price correction. With more buyers and fewer sellers, balance is returning to negotiations in parts of Southwestern Ontario, including the Greater Toronto Area.

For the first time in more than a year, the home price index in the GTA, Hamilton, Kitchener-Waterloo and Windsor recorded small monthly gains, he said. The index is also steadying in Vancouver and rising slightly in the Okanagan Valley, though the correction in the Fraser Valley continues. Calgary home prices appear to be “turning a corner,” with the home price index up for the second time in three months.

“The emerging market recovery in Canada appears to be holding — albeit just barely,” said Hogue. Though June extended the winning streak, sales in the month were still 12 per cent below the 10-year average. “There’s a long road ahead in the recovery,” he said.

Help is definitely wanted in Alberta. Astonishingly, the province has accounted for most of Canada’s net job growth since the end of 2024, according to Robert Kavcic, senior economist for BMO Capital Markets, who brings us today’s chart. Over the past year, employment rose more than 3 per cent, or 78,000 jobs, while employment in the rest of Canada grew just 0.4 per cent.

Most of the jobs were not even directly in the oil and gas industry. The reason for Alberta’s job boom? Kavcic said a stronger economy, less exposure to U.S. tariffs and more people moving to the province from within Canada and abroad explains the outperformance.

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