Is a Canadian Real Estate Recovery in the works? Early signs of recovery emerge despite persistent trade uncertainty.
June 2025 delivered cautious optimism across Canadian real estate markets as sales activity showed modest improvements in key centers, though buyer's market conditions persisted in most major urban areas. While Toronto and Vancouver demonstrated the first meaningful stabilization in months, trade tensions with the United States continued dampening buyer confidence despite the Bank of Canada maintaining accommodative monetary policy.
For comprehensive coverage of recent market shifts, see our May 2025 market analysis and insights on Trump's tariff impacts on Canadian real estate.
This market phase represents the early stages of what could become a gradual recovery, though economic headwinds remain substantial. Sales volumes improved month-over-month in most markets, yet year-over-year comparisons remained negative in Canada's largest metros. The national sales-to-new-listings ratio held steady at 47%, unchanged from May and firmly in buyer's market territory—while inventory levels remained elevated but stopped growing at the rapid pace seen earlier in 2025.
The Bank of Canada's June 4 decision to hold rates at 2.75% reflected growing caution about trade-related economic impacts, with Governor Tiff Macklem noting "high uncertainty" around tariff negotiations. Yet beneath this macro uncertainty, localized market dynamics varied dramatically: Toronto showed its best monthly performance since late 2024, Vancouver sales declines moderated significantly, while Montreal maintained seller's market strength despite broader economic concerns.
Toronto shows early stabilization signs
Toronto's housing market delivered its most encouraging performance in months, with 6,243 sales in June representing just a 2.4% year-over-year decline—a dramatic improvement from May's 13.3% drop. More significantly, monthly sales increased 8.1% on a seasonally adjusted basis, marking the strongest month-over-month gain since late 2024. However, this stabilization came alongside continued price pressure and elevated inventory.
Average selling prices fell 5.4% annually to $1,101,691, with the MLS® Home Price Index benchmark dropping 5.5% year-over-year to $995,100—the first time below $1 million since March 2021. The price decline affected all property types, with detached homes down 6% to $1.39 million and condominiums falling 4.3% to $696,000. Market psychology shifted toward cautious optimism rather than outright pessimism.
New listings totaled 19,839 units, up 7.7% annually, while active inventory reached 31,603 properties—a 30.8% increase from June 2024. Days on market extended to 42 days from 30 days last year, and homes sold for an average of 98% of asking price, indicating continued negotiating power for buyers. For Toronto purchasers, the market offered unprecedented choice with reduced competition. Sellers faced the reality of longer marketing periods and competitive pricing, though well-positioned properties continued attracting offers.
Source: Toronto Real Estate Board Market Watch and Globe Newswire. For detailed condo market analysis, see our Toronto condo market update.
Vancouver recovery signals strengthen
Metro Vancouver demonstrated the clearest signs of market recovery, with 2,181 sales in June representing a 9.8% year-over-year decline—significantly better than May's 18.5% drop. Greater Vancouver REALTORS® noted that "signs are emerging that sales activity is rounding the corner after a challenging first half to the year," with the year-over-year decline in sales halving from the previous month.
Benchmark prices reached $1,173,100, down 2.8% annually and 0.3% monthly, indicating price stabilization across most property types. Detached homes fell 4.7% year-over-year to $1,975,800, while apartments declined 3.0% to $753,300. The sales-to-active-listings ratio improved to 13.8%—still firmly in buyer's market territory but showing positive momentum from recent lows.
Active inventory reached 17,000+ units, creating abundant choice for buyers while maintaining downward pressure on prices. Vancouver's market psychology showed early signs of shifting from crisis-level pessimism toward cautious engagement. Trade uncertainty remained the primary factor keeping potential buyers on the sidelines, though improved affordability from lower prices and reduced competition began attracting some purchasers back to the market.
Source: Greater Vancouver REALTORS® Statistics and Storeys Vancouver Analysis
Montreal's Real Estate Market maintains market leadership
Montreal continued defying national trends with robust market activity, though specific June 2025 data remained limited at time of publication. Based on May momentum—where sales increased 10% year-over-year to 4,992 units—Quebec's largest market maintained its position as Canada's strongest major real estate center.
Average resale prices in May climbed 8.6% annually to $580,100, with the trend expected to continue through June based on early indicators. Montreal's sales-to-new-listings ratio of 66% indicated sustained seller's market conditions, supported by relative affordability compared to Toronto and Vancouver, plus continued francophone immigration preferences despite federal policy changes.
The Greater Montreal region benefited from economic stability relative to trade-dependent provinces, with government employment and service sectors providing steady demand. Construction activity remained below peak levels, supporting price appreciation through supply constraints. Montreal buyers continued facing competitive conditions requiring quick decision-making, while sellers maintained pricing power though realistic expectations remained important given broader economic uncertainty.
Source: QPAREB Market Analysis and Nesto Montreal Market Data
Calgary market balance solidifies
Calgary's real estate market continued its transition toward balanced conditions, building on May trends where 2,568 sales declined 17% year-over-year while inventory levels nearly doubled. The sales-to-new-listings ratio of 53% placed Calgary firmly in balanced market territory—a significant shift from the intense seller's market conditions that characterized 2022-2024.
Benchmark prices held steady around $589,900 in May, down 2.5% annually—Calgary's first annual decline since 2020. However, average prices rose 6% to $649,268, reflecting buyer migration toward higher-priced segments as affordability improved in the luxury market. The apartment condo segment faced particular pressure with inventory surges and price declines.
Alberta's economic outlook remained mixed, with oil production at record levels above 4 million barrels daily but provincial revenue projected to decline 8.1%—the largest single-year contraction in three decades. Unemployment rose to 7.4% while trade uncertainty created additional headwinds. Calgary buyers benefited from doubled inventory levels and reduced competition, particularly in higher price ranges. Sellers adapted to longer marketing periods and competitive pricing requirements.
Source: Calgary Real Estate Board (CREB®) and WOWA Calgary Market Data
Ottawa demonstrates regional resilience
Canada's capital continued outperforming national trends with 1,807 sales in May representing a 14.9% year-over-year increase—among the strongest performances in the country. The 33.1% month-over-month gain reflected what Ottawa Real Estate Board President Paul Czan described as a "delayed spring market" following federal election uncertainty.
Average prices rose 0.8% annually to $629,800, significantly outperforming broader Ontario markets experiencing price declines. Single-family homes gained 4.2% to $871,000, while townhouses increased 2.7% to $569,000. The sales-to-new-listings ratio of 53% indicated balanced market conditions providing opportunities for both buyers and sellers.
Ottawa's diversified economy anchored by government employment continued providing housing market stability despite broader economic uncertainty. Active inventory increased but remained manageable at 2.4 months of supply. Ottawa buyers enjoyed improved selection without extreme competition, while sellers benefited from steady demand and modest price appreciation.
Source: Ottawa Real Estate Board and Agent in Ottawa Stats
Bank of Canada maintains cautious stance
The Bank of Canada held its overnight rate at 2.75% on June 4, 2025, marking the second consecutive pause after seven cuts since June 2024. Governor Tiff Macklem emphasized that "uncertainty remains high" regarding U.S. trade policy, with tariff negotiations creating unprecedented economic complexity for monetary policy decisions.
CPI inflation fell to 1.7% in April, largely due to the elimination of federal carbon taxes reducing gasoline prices by 0.6 percentage points. However, core inflation measures rose above 3%, and the Bank noted "some unexpected firmness in recent inflation data." Business surveys indicated widespread expectations that tariffs would increase costs, with many firms planning to pass these increases to consumers.
Economic growth came in at 2.2% in Q1 2025, slightly above Bank forecasts, though composition included significant pre-tariff export surges and inventory accumulation. Unemployment rose to 6.9% as the labor market weakened, particularly in trade-intensive sectors. The Bank projected considerably weaker Q2 performance as export strength reversed and domestic demand remained subdued.
Source: Bank of Canada Rate Decision and Nesto Rate Analysis. Read our analysis on election impacts and tariff effects.
National trends point toward stabilization
National average home prices declined 0.3% to $687,898 through May 2025, with the Canadian Real Estate Association maintaining its revised forecast of essentially flat activity for the full year. Sales volumes are projected at 482,673 transactions—unchanged from 2024 despite significant rate cuts that brought borrowing costs down 2.25% from peak levels.
Immigration policy changes targeting 5% population growth caps by 2026 continue reducing housing demand projections by an estimated 670,000 units through 2027. Combined with elevated trade uncertainty and $155 billion in Canadian counter-tariffs, the economic environment remains challenging despite monetary policy accommodation.
Market psychology showed early signs of shifting from crisis-level pessimism toward cautious engagement, particularly in Toronto and Vancouver where the worst of the sales declines appeared to moderate. However, this tentative optimism remained highly dependent on trade resolution and continued monetary policy support.
Source: CREA Quarterly Forecasts and WOWA Canada Market Report
Conclusion: cautious optimism amid uncertainty
June 2025 marked a potential inflection point for Canadian real estate markets, with early signs of stabilization emerging despite persistent economic headwinds. The combination of improved monthly sales trends, moderating price declines, and sustained monetary policy support created conditions for gradual recovery, though the pace remained highly dependent on external factors.
For buyers, current conditions continued representing exceptional opportunities across Toronto, Vancouver, and Calgary markets. Abundant inventory, reduced competition, and negotiating power provided advantages not seen since 2019, while financing costs remained significantly below peak levels. However, economic uncertainty required careful consideration of employment stability and regional economic factors.
For sellers, success demanded strategic pricing, professional presentation, and realistic timeline expectations. The extreme seller's market conditions of 2021-2022 remained firmly in the past, replaced by more balanced dynamics requiring competitive positioning. Properties priced appropriately for current conditions continued attracting offers, while overpriced inventory faced extended marketing periods.
The market's trajectory through summer and fall 2025 hinged primarily on U.S.-Canada trade resolution and whether monetary policy accommodation could overcome persistent economic uncertainty. Regional divergence suggested that successful navigation required understanding local economic factors rather than relying on national trends, with government-anchored markets like Ottawa outperforming trade-dependent centers.
For additional market insights, explore our coverage of rental market trends, political impacts on housing policy, and condo market conditions.
Expert Legal Support for Your Real Estate Transaction
Whether you're capitalizing on Toronto's improved conditions, navigating Vancouver's recovery signals, or exploring opportunities across Canadian markets, Deeded's virtual legal services provide the expertise and efficiency your transaction deserves. Our transparent, flat-rate pricing and dedicated legal team ensure a seamless closing process in any market condition.
Unlock Your Seamless Closing Experience
Your Journey to a Worry-Free Closing Starts Here!
