Tax rebates may boost new home sales as price declines deepen in Vancouver, Calgary

Home values are falling across British Columbia, Alberta, and Ontario even as tax rebates on new home purchases loom, RBC Economics reported. The steepest annual price drop occurred in Vancouver, where the composite MLS Home Price Index fell 6.8% from a year earlier in March — the sharpest decline since spring 2023, when rising interest rates triggered a market correction. Resale activity in Vancouver dropped an estimated 4% between February and March on a seasonally adjusted basis, while new listings fell 10% from a year earlier, slowing a long-running inventory build-up. In Calgary, the composite MLS Home Price Index was down 4.2% from a year earlier — its steepest annual decline in 10 years — despite a broadly balanced market where sales and new listings fell at similar rates. RBC Economics attributed Calgary’s prolonged price weakness partly to a surge in homebuilding since 2022, with builders working on a record 26,000 units as of the report’s publication. Across all markets, RBC Economics noted that recently announced tax rebates on new home purchases could accelerate sales of newly built homes in the near term.