Royal LePage Predicts Modest Growth in Canadian Housing Market Despite Sluggish Spring Start
Canada's spring housing market experienced a slow beginning this year, but a recent increase in activity suggests the market may be warming alongside the weather, according to a new report from Royal LePage. The real estate company's quarterly home price update and market forecast, released recently, indicates that while the national average home price declined by two percent year over year, it saw a slight increase of 0.7 percent from the final quarter of 2025.
Market Data and Price Trends
In the first quarter of 2026, the average price of a home in Canada stood at $812,900. The report, which analyzes housing data across 65 of Canada's largest markets, attributes the sluggish spring start to a combination of economic and seasonal factors. Phil Soper, chief executive of Royal LePage, noted that in a typical spring season, Canada's housing market would already be gaining momentum, but persistently low consumer confidence continues to drag on activity, particularly in the most expensive markets.
"In a typical spring, Canada's housing market would already be gaining momentum, but persistently low consumer confidence remains a drag on activity, especially in our most expensive markets," said Soper.
Economic Factors Impacting Consumer Confidence
The report highlights that rising energy prices due to global conflicts, along with trade tensions between Canada and the United States, have weighed heavily on consumer confidence. This economic uncertainty has left many potential buyers hesitant to enter the market. The absence of first-time buyers has created ripple effects throughout the market, slowing sales and prompting more cautious behavior among existing homeowners. Many sellers are now choosing to list their homes before committing to a purchase, marking a shift from the more aggressive buying patterns observed in recent years.
"First-time buyers are the engine of the housing market, and when they pause, it ripples through every segment," emphasized Soper.
Underlying Demand and Market Improvements
Despite the slower pace, underlying demand remains strong. According to Bank of Canada data cited in the report, nearly 29 percent of Canadians indicate they are likely to move within the next 12 months, up from 22 percent a year earlier. Soper pointed out that the market has improved meaningfully, with competition between buyers easing, interest rates stabilizing, and home prices leveling off across much of the country. He added that prices have declined in expensive markets like Toronto and Vancouver, narrowing the gap with more affordable cities.
Specifically, prices in the Greater Toronto Area and Greater Vancouver, Canada's two largest and most expensive housing markets, fell by 4.7 percent and 4.5 percent, respectively, compared with a year earlier.
Buyer Behavior and Future Catalysts
Shawn Zigelstein, broker at Royal LePage Signature Realty, observed that buyers are currently exploring and conducting research but are not yet moving aggressively with offers. "Buyers are out exploring and doing their homework, but many aren't moving aggressively with offers just yet," said Zigelstein.
One potential catalyst for increased activity is the possibility of interest rate changes in response to rising inflation, which could prompt some buyers to act sooner rather than later. This factor, combined with the stabilizing market conditions, suggests that while the spring start was sluggish, modest growth is expected for the remainder of the year as economic uncertainties gradually resolve and consumer confidence begins to recover.
