Canadian home prices continued to trend upward in May 2025, but growth is slowing as economic uncertainty and a prolonged condo slump weigh on some of the country’s largest cities. Emerging trade tensions are also beginning to influence buyer sentiment in select markets.
The May RPS House Price Index showed a 1.1% year-over-year increase, marking the third consecutive month of slowing growth and the most modest annual rise since August 2023. The national trend points to a cooling trajectory, particularly in higher-priced urban centres where prices are dipping.
This shift reflects broader affordability challenges, a sustained slowdown in the condo sector, and the early effects of U.S. tariffs on key Canadian exports. While home prices remain elevated compared to a year ago in most regions, the pace of growth is softening.
Prices Further Decline in Toronto, Vancouver, and Hamilton
May marked another turning point in the country’s priciest housing markets. Toronto home values declined by 2.5% year-over-year, while Vancouver posted the steepest drop at 3.8%. Hamilton also saw a 2.7% decline, reflecting its exposure to shifting economic conditions.
The sluggish condo market continues to impact Canadian home price growth, but it is not the only headwind. Tariffs have also challenged consumer confidence, with some local economies feeling the impact more than others.
Hamilton, Canada’s main producer of steel, is particularly sensitive to trade policy developments. The Canadian Chamber of Commerce notes that the city accounts for roughly 60% of the country’s steel output. With new U.S. tariffs targeting Canadian steel, Hamilton’s economy and its housing market face heightened uncertainty. Toronto, by contrast, is less reliant on exports and has been more insulated from the effects of international trade tensions.
Vancouver’s downturn continues to be driven in part by elevated condo inventory. Levels have nearly doubled since 2022, with a wave of newly completed units from past pre-sale cycles adding sustained pressure. This has contributed to slower price growth and a more competitive resale environment in the region.
Quebec and Alberta Remain Strong
Despite the broader deceleration, several major markets continued to post solid annual gains.
Quebec City once again led the country, with home values rising 13.6% year-over-year, driven by limited supply and continued demand. Montreal followed with a 7.5% increase, maintaining its momentum as one of the stronger-performing markets.
Edmonton saw values rise by 9.7%, outpacing Calgary (+4.5%) for the fourth consecutive month. This trend reflects affordability-driven demand shifts within Alberta, as well as relative economic resilience in the province.
National Trend Points to Broader Slowdown
Across the country, annual price growth in all 13 metro areas slowed in May compared to April. While home prices in many markets remain higher than a year ago, this overall easing signals a broader shift in Canada’s housing landscape.
Methodology
Why do house price indexes differ? Each provider may use different data sources, geographic coverage, property type definitions, and methodology. While composite values may vary across providers, the overall trends are generally consistent. Learn more about the RPS HPI methodology.
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Josh is a staff writer at RPS. He has been reporting on the national real estate market for 10 years, including for some of Canada’s largest newspapers and magazines.