Posthaste: These three provinces are bucking Canada’s housing downturn

Canada’s housing market slouched into 2026, and economists aren’t overly enthusiastic the pace will pick up much in the new year.

Ongoing economic uncertainty from trade disputes with U.S. President

Donald Trump , slowing population growth and little hope of further interest rate relief are all expected to continue to weigh on the housing market, which ended 2025 with sales and prices down around four per cent.

Ontario stood out as the weakest market in Canada, with average home prices falling the most of any region in the country,

said Rishi Sondhi , an economist with Toronto Dominion Bank.  Toronto condo prices have now lost almost all of their pandemic gains after nine straight quarters of decline, he said.

British Columbia was almost as bad with sales down six per cent for the year and prices down three per cent. Vancouver’s showing was worse, with sales and prices falling four and 10 per cent, respectively.

But though these two housing markets are large and hold sway over the national numbers, they are far from the whole story of Canada’s housing market, said economists.

“Regional divergences was the real story,” said Robert Hogue , assistant chief economist at Royal Bank of Canada. “Weakness has been concentrated in Ontario and B.C., while other parts of the country held up relatively better.”

Some exceptionally well. According to TD, the performance of Newfoundland and Labrador’s housing market has been “remarkable,” with price growth last year beating the national average by the largest margin since the Global Financial Crisis. For the second straight year, the province posted nearly double-digit price growth.

Unlike some regions of the country, Newfoundland and Labrador has avoided the worst impacts of Trump’s trade war because much of its main export, oil, goes to Europe, said Sondhi. The economy has been solid, the homes affordable and sales healthy, supporting this nation-beating trend.

TD expects the province’s economy to cool in the coming year, but “tight near-term supply/demand balances and very favourable affordability should keep quarterly price growth above-trend.”

Saskatchewan is also one of the hottest real estate markets in the country with average home prices rising nine per cent in 2025. Firm job growth, a comparatively strong economy and more affordable homes have supported the market.

“With Saskatchewan’s economy set to gear-down but outperform Canada’s again this year, we see home price growth slowing but remaining solid,” said Sondhi.

Then there is Quebec, specifically Quebec City . Price gains in the capital city of this province hit a whopping 17 per cent in 2025, with other regions of the province also showing healthy advances.

Surprisingly, considering its exposure to the trade war, consumer confidence remains high in Quebec, said Sondhi. Elevated household savings rates also likely helped with down payments. Though there has been an uptick in home building, much of it has been for purpose-built rentals, keeping the home ownership market tight.

However, forecasters expect price growth to slow considerably over the coming year as higher prices discourage buyers.

“Rapid price appreciation in markets like Quebec City may be creating headwinds,” said Hogue. “Resales have weakened considerably in recent months as the pace of price gains materially erodes affordability.”

Toronto Dominion expects pent-up demand to drive a “modest, gradual recovery” in Canada’s housing market later this year, assuming trade negotiations and geopolitical tensions don’t further stoke anxiety over the economy.

“In terms of risks to the outlook, on the upside we must be mindful that housing activity has had some tendency to surprise expectations to the upside in the past, which is certainly possible given large pent-up demand in key markets,” said Sondhi.

 Sign up here to get Posthaste delivered straight to your inbox.

Economists were divided Monday about the Bank of Canada’s next move after headline inflation accelerated more than expected in December, but core measures eased. The inflation rate rose to 2.4 per cent in December, up from 2.2 per cent the month before. Core data, however, broadly eased.

“There is no case here for the Bank of Canada to even think about raising rates,” said David Rosenberg, founder of Rosenberg Research & Associates Inc., in a note.

Others found the possibility of a rate cut also unlikely. “It would take a serious deterioration in the economy and some further signs of core inflation decelerating to again open the door for renewed policy easing — we’re simply not there yet,” said BMO Capital Markets chief economist Douglas Porter.

After the data, markets odds of a Bank of Canada hike by the end of year fell from 80 per cent to 43 per cent.

• Prime Minister Mark Carney will give a keynote speech today at the World Economic Forum in Davos, Switzerland on the emerging new world order and how Canada plans to deal with it.
• Empire Club of Canada hosts Financial Outlook 2026: Navigating What’s Next for the Canadian and Global Economies, in Toronto, featuring RBC chief economist Frances Donald and TMX Group CEO John McKenzie
• Earnings: Netflix Inc., United Airlines Holdings Inc., U.S. Bancorp, 3M Co.

• Hole left by Hudson’s Bay’s demise will be hard to fill
• Canadian investors: Is your portfolio up to a new world order?
• Artificial intelligence blame for video-game industry layoffs may be misguided

Kelley Keehn, chief executive of the Money Wise Institute, speaks with Financial Post’s Larysa Harapyn about Keehn’s new book, Save Your Self, which dives into the concept of “money identity” and how that drives our decisions about personal finances.

Watch the video Interested in energy? The subscriber-only FP West: Energy Insider newsletter brings you exclusive reporting and in-depth analysis on  one of the country’s most important sectors.

McLister on mortgages

Sign up here. Want to learn more about mortgages? Mortgage strategist Robert McLister’s

Financial Post column can help navigate the complex sector, from the latest trends to financing opportunities you won’t want to miss. Plus check his

Financial Post on YouTube

mortgage rate page for Canada’s lowest national mortgage rates, updated daily. Visit the Financial Post’s YouTube channel for interviews with Canada’s leading experts in business, economics, housing, the energy sector and more.

Today’s Posthaste was written by Pamela Heaven with additional reporting from Financial Post staff, The Canadian Press and Bloomberg.

Have a story idea, pitch, embargoed report, or a suggestion for this newsletter? Email us at 

• Mortgage borrowers who held out for lower rates are paying the price
• Here’s where home prices plunged the most in tough year for Canada’s housing market

posthaste@postmedia.com . Bookmark our website and support our journalism: Don’t miss the business news you need to know — add financialpost.com to your bookmarks and sign up for our newsletters here