House gross sales are gaining traction once more after a tough winter and spring. July marked the fourth straight month-to-month improve, with nationwide exercise up 3.8% from June and greater than 11% above March lows. The Better Toronto Space has been a key driver, the place transactions have surged 35.5% over that stretch.
Regardless of these indicators of renewed momentum, RBC Economics cautions that the restoration can be uneven. Its newest forecast initiatives nationwide resales will fall 3.5% this yr earlier than rebounding in 2026, whereas costs are anticipated to slide subsequent yr underneath the load of Ontario and B.C.’s excessive inventories.
“Encouragingly, latest indicators of an ongoing restoration have emerged,” mentioned Robert Hogue, assistant chief economist at RBC. “Potential patrons are re-entering the market as financial fears ease and decrease rates of interest achieve traction. We anticipate this gradual restoration to proceed within the second half of 2025, setting the stage for stronger demand in 2026.”
Brighter outlook for 2026
RBC sees resales rebounding 7.9% subsequent yr to 504,100 items, greater than offsetting this yr’s decline however nonetheless falling wanting pre-pandemic norms. The forecast requires bettering job circumstances and decrease borrowing prices to assist convey extra patrons again, though affordability pressures will cap how far demand can run.
The unemployment price is anticipated to peak at 7.1% later this yr earlier than easing in 2026, giving households extra confidence to make longer-term commitments like house purchases.
Costs underneath strain in key markets
Nationwide costs are anticipated to edge up by 0.7% this yr, however RBC says these beneficial properties are front-loaded. It initiatives a 0.7% decline in 2026 as Ontario and B.C. proceed to face decade-high ranges of provide and powerful competitors amongst sellers.
“Till then, sturdy competitors amongst sellers will seemingly maintain costs underneath strain with declines persevering with into early 2026 earlier than steadying,” Hogue famous.
In distinction, tighter markets in Quebec, the Prairies and components of Atlantic Canada are anticipated to see modest worth will increase over the following two years.
Structural challenges linger
Whereas decrease rates of interest have helped convey possession prices to their most reasonably priced stage in three years, RBC says affordability stays nicely above pre-pandemic ranges within the nation’s priciest markets.
Hogue provides that the Financial institution of Canada’s price cuts since mid-2024 “have but to completely play out,” with final fall’s restoration lower brief by the commerce struggle. He expects momentum to renew as borrowing prices filter by, however doesn’t anticipate additional stimulus, with RBC’s forecast calling for the coverage price to carry at 2.75% by 2026 and longer-term charges drifting greater as markets cut back expectations for added easing.
Demographic shifts are additionally anticipated to weigh on demand, with diminished immigration targets slowing family formation and retaining investor exercise muted in main city centres.
In response to RBC, the softness displays a correction from the pandemic increase. Rock-bottom charges, earnings helps and shifting housing wants pulled demand ahead, leaving the market to steadily settle again into stability.
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Final modified: August 22, 2025
