Two separate reports see stability ahead as mainstream prices ease; luxury holds firm as condos lag this spring
Canada’s housing market is lining up for a busier spring, but two fresh reads on the landscape suggest the recovery will be uneven across price bands and property types.
A national mainstream view from Royal LePage points to gently declining prices and a spring pickup that “rises, but not surges,” while a luxury-focused year-end report from Engel & Völkers describes a market that largely stopped accelerating in 2025 but didn’t meaningfully retreat either, with the most liquid high-end segment continuing to do the heavy lifting as policy and transaction costs shape behaviour.
READ: Ultra-luxury real estate set to outpace broader market in 2026
RLP’s fourth-quarter snapshot shows the aggregate home price down 1.5% year over year to $807,200, with a similar 1.1% decline versus the prior quarter. The firm frames the late-2025 slowdown as more about psychology than fundamentals, arguing buyers are still cautious even as costs of borrowing ease.
By contrast, Engel & Völkers’ luxury lens (homes over $1 million in five major markets) points to pricing that “moderated” rather than reversed, even where supply expanded. The report describes a recalibration as activity improved in the second half of 2025 as rate cuts and policy clarity helped sentiment, but volumes still sat below pre-2022 peaks.
Where the two perspectives overlap is the idea that 2026’s spring market is more likely to resemble a simmer than a boil.
“Despite subdued activity levels, home prices largely held their ground in the final quarter of 2025,” said Phil Soper, president and CEO, Royal LePage. “Economic uncertainty – driven by trade disputes and broader geopolitical tensions – has weighed on consumer confidence and muted what is typically a more active fall market. Instead of a fall seasonal surge, we saw a quieter close to the year.
“That said, buyers heading into the spring market have a meaningful advantage over last year: lower borrowing costs, stable or lower property prices, and choice. In an era where home inventory is chronically constrained, inventory levels are Goldilocks healthy. Together, these conditions are creating a genuine window of opportunity, particularly for first-time buyers in Canada's most expensive markets.”
RLP’s report highlights a widening regional spread. Quebec City posted the strongest year-over-year aggregate price increase among major regions (13.2%), while Toronto and Vancouver recorded declines of 5.7% and 4.1%, respectively. Engel & Völkers similarly depicts Toronto and Vancouver as stable but selective at the top end, with transaction costs and policy acting as speed bumps, while markets like Ottawa, Halifax and Montréal showed renewed momentum in key luxury brackets.
The biggest divergence between the reports is what’s happening inside the market, not just across regions.
RLP highlights ongoing weakness in urban condos, linking it to elevated inventory, investor pullback, and first-time buyer hesitancy.
“Condominium markets in major urban centres remain under pressure, as weaker demand continues to collide with increased supply,” said Soper. “During the brief period of elevated interest rates following the pandemic, many small-scale investor-landlords found the cash flow math no longer worked. Higher carrying costs forced some to exit the market, adding to resale supply.”
He added that “Under normal conditions, investors would be expected to return as borrowing costs eased through 2024 and 2025. This time, however, the timing worked against them. Reductions in immigration numbers, as well as quotas for temporary foreign workers and international students, have sharply curtailed rental demand, leaving fewer tenant customers just as rates began to fall.”
Engel & Völkers’ luxury data tells a related story, but with a different focal point: the ‘anchor’ segment in high-end markets is not the ultra-wealthy trophy tier, it’s the $1 million to $1.99 million band.
Across the covered luxury markets, the report calls the $1–$2.99 million range the most liquid and resilient, describing it as the primary engine of activity in 2025. In other words, even when pricier segments slowed, the move-up luxury buyer kept transacting, especially where affordability improved.
Above that, Engel & Völkers characterizes ultra-luxury as “selective but resilient,” with volume thin and outcomes highly property-specific. It also flags policy and transaction costs as a defining feature of luxury velocity, pointing to foreign buyer restrictions and transfer-tax friction as dampeners, particularly in Toronto and Vancouver. That helps explain why luxury can feel “stable” at a macro level while still being patchy deal-to-deal: fewer transactions, tighter buyer criteria, and a premium placed on turnkey quality.
In summary, in the mainstream market the spring setup looks like improved affordability, healthier inventory, and cautious buyers who may finally re-engage. In the luxury market, stability is being carried by the most affordable luxury rung ($1–$1.99 million), while higher tiers are shaped by policy costs and selectivity. Condos remain the weak link in major urban centres, which matters for clients who rely on rental cash flow, renewal risk management, or portfolio diversification via small residential investment units.
