RBC: Housing Market Confidence Improving Amid Price Declines
RBC Economics reports cautious optimism in Canada’s housing market as consumer confidence improves despite price declines, with low inventory sustaining seller leverage and regional differences shaping market recovery.
- Confidence is slowly improving in Canada’s housing markets despite continuing price drops.
- Active listings remain historically low, keeping seller leverage high.
- Listings haven’t increased meaningfully—new listings dropped in two of the last three months.
- July MLS Home Price Index (HPI) showed a –2.7% decline YoY across all housing types.
- Median prices YoY gains:
- Single-family: +6.8%
- Condos: +3.4%
- Regional highlights:
- Vancouver: Resales rose ~10% in July from June, pushing sales-to-new-listings closer to balance.
- Calgary: New construction added significant supply; HPI down ~3.9% YoY. Resales grew ~2% from June.
Why It Matters
- Rising confidence matters: Even though prices are declining, improved sentiment may encourage more buyers to enter the market.
- Low inventory keeps sellers in control: Despite price drops, sellers maintain leverage due to a tight supply of listings.
- Mixed price trends: While some regions like Vancouver show signs of stabilization, others—like Calgary—are balancing supply and demand with downward price movement.
- Affordability constraints persist: Despite improved median prices, affordability challenges limit strong bounce-backs—especially if supply remains constrained.
Visual Summary
RBC Housing Confidence Snapshot — July 2025
• Confidence: Slowly improving despite price drops
• Listings: Historically low; new listings down recently
• MLS HPI: –2.7% year-over-year for all home types
• Median YoY gains: Single-family +6.8%, Condo +3.4%
• Vancouver: +10% resales month-over-month; balance returning
• Calgary: +70% new homes; HPI –3.9% YoY; resales +2% from June
• Confidence: Slowly improving despite price drops
• Listings: Historically low; new listings down recently
• MLS HPI: –2.7% year-over-year for all home types
• Median YoY gains: Single-family +6.8%, Condo +3.4%
• Vancouver: +10% resales month-over-month; balance returning
• Calgary: +70% new homes; HPI –3.9% YoY; resales +2% from June
Key Takeaways
| Insight | Implication |
|---|---|
| Improving confidence | Could boost buyer activity even amid price declines |
| Seller leverage remains strong | Low inventory sustains seller advantage |
| Vancouver recovery signs | Local markets may adjust faster toward equilibrium |
| Calgary balancing supply and demand | Extra supply is fostering market rebalancing |
| Affordability still a barrier | Challenges persist, limiting quick market rebounds |
Shahrukh Khan
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