Buyers gain leverage as Canadian home prices fall 20% from peak and supply swells

Canadian homebuyers now hold the upper hand as prices fall 20% from their 2022 peak and supply expands, reshaping housing market dynamics across the country. In March, just 38,700 homes changed hands — the weakest start to the spring market in 17 years — as buyers remain cautious amid economic uncertainty and elevated ownership costs. The national MLS Home Price Index has dropped 4.7% over the past year and is down 20% from its peak in early 2022, with a further 0.4% decline between February and March.

Demand has weakened for five straight months, even as new listings fell 0.2% in March, continuing a trend of declining supply in six of the past seven months. Yet total active listings are 1% higher than last year and approaching the six-year high seen mid-2023. In Ontario and British Columbia, where inventory sits at near-decade highs, sellers face growing pressure. In Toronto, the MLS HPI has fallen 7.4% year-over-year; in Vancouver, it’s down 6.8%. Other Ontario markets — Kitchener-Waterloo (-8.6%), Barrie (-8.4%), Hamilton (-7.3%) — are seeing deeper corrections.

Alberta’s markets are also cooling. Calgary’s HPI dropped 3.0% and Edmonton’s 2.9% as new construction eases prior supply shortages. Meanwhile, cities with tighter supply are seeing gains: Regina up 6.3%, Saskatoon 5.4%, Quebec City 10.1%. With interest rates expected to hold and immigration policies tightening, a broad market rebound remains unlikely. Abundant inventory in Ontario and B.C. is expected to sustain or intensify downward pressure on prices.