Ontario leads as supply tightens, but condo prices and fragile confidence cloud the recovery
Canada's housing market posted its biggest monthly gain in a year and a half in May 2026, with home resales climbing 5.5% month-over-month on a seasonally adjusted basis. That's the second consecutive uptick and a sign that the extended lull may be easing, according to an analysis by Rachel Battaglia, Economist at Royal Bank of Canada (RBC).
The improvement has brought national resale activity nearly in line with year-ago levels, though Battaglia noted that volumes remain below pre-pandemic averages in most major markets across the country.
Ontario leads resales boost
Ontario was the clear standout, with resales rising 8.8% seasonally adjusted from April. Greater Toronto Area markets delivered the strongest results, with Toronto, Mississauga, and York Region all posting double-digit gains.
Markets just beyond the GTA — Hamilton-Burlington, the Niagara region, and Kitchener-Waterloo — also climbed, though more in line with the national average.
The Ontario gains coincide with a labour market improvement in the GTA and the formal passage of the province's new Home HST rebate targeting new construction.
While the rebate is aimed at new builds, Battaglia wrote that renewed interest there could spill over into the resale market if sentiment improves, a dynamic brokers across Canada have been closely monitoring since spring began.
Winnipeg posted the country's largest monthly gain at 12.6% seasonally adjusted, while Saskatoon added 3.7%.
Alberta's major centres saw little movement, though both remain well above pre-pandemic averages.
British Columbia recorded moderate gains following prolonged weakness.Quebec's picture was uneven, with Montreal and Quebec City advancing as smaller markets pulled back.
On the supply side, new listings fell 1% month-over-month seasonally adjusted, pushing the sales-to-new-listings ratio to 49.2% from 46.2%, the highest reading of 2026 so far.
Prairie and Eastern Canadian markets remain among the tightest in the country, a pattern Canadian Mortgage Professional recently tracked in its mid-year mortgage market analysis.
Prices stabilise, but condos drag
The national composite MLS Home Price Index (HPI) slipped just 0.1% month-over-month in May, unchanged from April, as ample inventory continued to temper price growth despite firming demand.
Nationally, prices remain 4.1% below a year ago, with Toronto down 6.7% and Vancouver off 6.2% year-over-year.
Condo values sit 6.5% below year-ago levels, with the steepest declines in the Fraser Valley, Toronto, and Niagara Region.
Montreal remains the only one of Canada's six largest markets showing annual price gains, though Battaglia warned that recent condo price dips there could disrupt the long-running uptrend if supply builds without a meaningful lift in resales.
The spring rebound remains fragile. Labour market dynamics, geopolitical tensions, and tariff policy will shape the market's second-half trajectory, with implications for both borrowers and the Bank of Canada's next move.
Make sure to get all the latest news to your inbox on Canada’s mortgage and housing markets by signing up for our free daily newsletter here.
