Three Provinces Stand Out Amid Canada's Cooling Housing Market
As Canada's housing market enters 2026 with continued sluggishness, economists note a striking regional divergence. While national figures show sales and prices down approximately four percent, three provinces are demonstrating remarkable resilience and growth against the broader downturn.
National Context and Economic Headwinds
The Canadian real estate landscape faces multiple challenges as the new year unfolds. Ongoing economic uncertainty stemming from trade disputes with the United States, slowing population growth, and limited prospects for further interest rate relief continue to weigh heavily on housing activity. These factors contributed to a disappointing end to 2025, with both sales volumes and average prices experiencing notable declines across much of the country.
Economist Rishi Sondhi of Toronto Dominion Bank highlights Ontario as particularly weak, with average home prices falling more significantly than any other region in Canada. Toronto's condominium market has been especially hard hit, having now lost nearly all pandemic-era gains after nine consecutive quarters of decline.
British Columbia follows closely behind, with annual sales dropping six percent and prices falling three percent. Vancouver's performance was even more concerning, with sales declining four percent and prices plummeting ten percent over the same period.
Regional Divergence: The Real Story
Robert Hogue, assistant chief economist at Royal Bank of Canada, emphasizes that regional differences tell the true story of Canada's housing market. "Weakness has been concentrated in Ontario and British Columbia, while other parts of the country held up relatively better," Hogue notes. Some regions have performed exceptionally well despite the national trend.
Newfoundland and Labrador: Remarkable Performance
According to TD Bank analysis, Newfoundland and Labrador's housing market has delivered remarkable results. The province's price growth in 2025 exceeded the national average by the widest margin since the Global Financial Crisis. For the second consecutive year, Newfoundland and Labrador posted nearly double-digit price increases.
Several factors contribute to this exceptional performance. Unlike other regions heavily impacted by trade tensions, Newfoundland and Labrador's primary export—oil—largely goes to European markets, insulating the province from the worst effects of international trade disputes. The local economy has remained solid, housing remains affordable relative to other provinces, and sales activity has stayed healthy.
While TD expects some cooling in the provincial economy during the coming year, tight supply-demand dynamics and very favorable affordability conditions should maintain above-trend quarterly price growth.
Saskatchewan: Sustained Market Strength
Saskatchewan has emerged as another hot spot in Canada's real estate landscape, with average home prices climbing nine percent in 2025. This strong performance stems from several supportive factors:
- Firm job growth throughout the province
- A comparatively robust provincial economy
- More affordable housing options than many other regions
Economists anticipate Saskatchewan's economy will moderate somewhat in 2026 but continue to outperform the national average. This should translate to continued solid home price growth, albeit at a somewhat slower pace than the exceptional gains of 2025.
Quebec: Particularly Quebec City's Surprising Strength
Quebec, and specifically its capital city, has demonstrated surprising resilience in the face of national housing challenges. Quebec City recorded an impressive seventeen percent price gain in 2025, with other regions across the province also showing healthy advances.
This performance is particularly noteworthy given Quebec's exposure to international trade tensions. Consumer confidence has remained unexpectedly high throughout the province, and elevated household savings rates have likely facilitated down payments for prospective buyers. While home construction has increased, much of this activity has focused on purpose-built rental properties, keeping the home ownership market tight and supporting price growth.
Looking Ahead to 2026
The Canadian housing market enters 2026 with clear regional disparities. While Ontario and British Columbia continue to face significant challenges, Saskatchewan, Newfoundland and Labrador, and Quebec demonstrate that local economic conditions, affordability factors, and regional economic insulation can create pockets of strength even during broader market downturns.
Economists will be watching these regional divergences closely as the year progresses, particularly how factors like trade policy, interest rate environments, and provincial economic performance continue to shape Canada's complex real estate landscape.
