Canada's Housing Market May Be Nearing the Bottom: Economists

After four years of decline, Canada's housing market may be nearing the bottom. BMO Capital Markets senior economist Robert Kavcic believes prices have found a floor due to lower borrowing costs and rising incomes. He notes that excessive speculation during the pandemic boom, aggressive interest rate hikes by the Bank of Canada, and reduced supply are no longer driving the downturn.

Kavcic's forecast comes with caveats: he expects weakness in certain markets, such as Toronto condos, to persist into 2027. However, he sees a new phase emerging where lower prices and reduced supply begin to rebalance the market.

Ben Rabidoux of Edge Realty Analytics agrees that housing market bottoms rarely present as dramatic turning points. Instead, they tend to emerge slowly as new supply dries up while demand gradually rebuilds. Rabidoux notes that recent data suggest these conditions are beginning to emerge: national home sales have risen 7% from their March low, and Ontario's active listings have declined.