What to know
- Canada’s average home price fell three per cent year-over-year in July, while national home sales were down 5.3 per cent from last year.
- Toronto recorded the largest price decline among 13 major markets, with prices falling eight per cent, while Hamilton, Victoria and Vancouver also saw declines.
- Buyers looking for newly built condos in markets such as Toronto and Vancouver may have more negotiating power as demand remains low.
- Prices for detached homes and townhouses in competitive Toronto neighbourhoods have been more resilient, meaning buyers may still face higher prices.
- One expert says lower prices could create opportunities for buyers, but market conditions vary significantly by location and property type.
As the real estate market continues to navigate a slower patch, Canada’s home prices have continued to decline this summer.
The July 2026 House Price Index, published by real estate platform Wahi and Real Property Solutions (RPS), revealed that average national home prices have fallen by three per cent year-over-year in July, remaining the same as June.
RPS-Wahi Economist Ryan McLaughlin tells Now Toronto that the decline is in line with what has been observed in the market recently.
“What we see is kind of the same pattern that we’ve been seeing for quite some time. It’s really been quite consistent,” he said.
“Maybe on a more recent basis… If we’re looking at month over month changes, it may be that at least prices have stopped declining.”
Canada’s housing market has been on a slower patch over the past year. According to the Canadian Real Estate Association (CREA), national home sales have declined 5.3 per cent in July compared to last year, despite having climbed 0.5 per cent on a month-over-month basis.
Read More
Sales down mainly in Toronto, Hamilton, Vancouver
According to McLaughlin, the national decline is being driven mainly by certain municipalities. Among 13 major markets in the country, Toronto was recorded at the bottom of prices, with an eight per-cent decline, preceded by Hamilton at seven per cent, Victoria at six per cent and Vancouver at four per cent.
In turn, other Canada municipalities have registered significant growth, including Quebec City with an 11 per cent price increase, Montreal at six per cent, and Saskatoon at four per cent.
Why prices are declining
As explained by McLaughlin, tariffs and economic uncertainty has kept many buyers on the sidelines over the past year, as affordability remains a concern for many. However, homebuyer sentiment is not the only thing holding the market down.
Especially after the pandemic, some of the country’s major cities, including Vancouver and Toronto, registered a boom in construction of condo units, particularly in studio and one bedroom apartments.
Now, a few years later, these units are being completed, but demand for them has not followed, leaving multiple condos vacant as developers struggle to sell. In hopes of encouraging buyers to look for those units, prices have in turn declined.
“I wouldn’t say that there was an overbuild of housing in general but perhaps in those particular segments, those particular products, studio and one-bedroom condo, in particular markets in GTA and GVA, and then also in Hamilton and Victoria, there was some amount of overbuilding,” McLaughlin said.
“There’s quite a high vacancy rate, and the developers have had trouble selling those units.”
Another market aspect driving prices down could be linked to the decline in immigration rates.
The federal government has shifted its immigration policies in 2026, significantly reducing the inflow of temporary residents in response, partly, to housing pressures. As the new policies kick in, the country has registered a 55,025 or 0.1 per cent population decline in the first quarter of the year alone.
Toronto has also registered a dramatic population decline, going from ranking No. 1 in the country for population growth in 2024 to No. 412 in 2025, according to a report by the Toronto Metropolitan University (TMU). Other major cities, including Montreal and Vancouver have fallen dramatically by 20 and 86 positions respectively.
“These are the cities where immigrants typically come first in many cases…Because the Government of Canada has really changed course on its immigration policy…I think that that issue is concentrated there,” McLaughlin said.
As population declines in these cities, so does the demand for housing, which slowers market conditions and forces developers to put a cap on housing prices.
What this means for buyers
Although lower sale prices might automatically sound like a great deal to buyers, they might still depend on local conditions, and the type of property they seek.
Given current market conditions, those looking to buy a condo in major markets such as Toronto or Vancouver might now be able to find deals, as demand remains low.
“If you’re really in the market for a newly-built studio condo in Vaughan, Ont. You’re very much in a buyer’s market at the moment,” McLaughlin said.
In contrast, those looking for townhouses or detached homes in Toronto’s competitive neighbourhoods might still find prices to be stiff, as McLaughlin says prices in those areas have indeed not been falling.
Similarly, those looking to buy in other regions of the country where the same condo or population booms have not happened, might also find conditions to be different.
Will market conditions take a turn this fall?
With this decline being consistent with current market conditions, experts will be watching out for any changes this fall.
As explained by McLaughlin, as people continue to save for their down payments and start making more money in their thirties or forties, demand for housing might soon pick up.
“Eventually, people want to make a transaction, and the longer prices move sideways, in inflation-adjusted terms, that also means prices are declining in some ways,” he said.
“This pent up demand that’s just building, eventually that’s going to translate into an uptick in sales…We shouldn’t expect to see the number of transactions declining further.”
However, experts can still not predict with certainty when prices might pick up.
