Regional Market Differences: Why National Headlines Don’t Tell the Full Story

Canadian home prices have been relatively flat or down slightly in recent months, but national headline figures cloak several significant regional differences.

By Josh Sherman | 4 minute read

In stark contrast to the declining national RPS-Wahi House Price Index reading for Canadian home prices in April (-3%), home values soared 12% annually in Quebec City and 8% in Montreal.

There is an old joke in the field of economics: an economist is standing with one foot in ice while the other is on fire. When asked to assess the situation, the economist concludes, “On average, everything’s great!”

According to Kari Norman, Senior Economist at Desjardins, this joke demonstrates the trouble with using national headline numbers to draw conclusions about the Canadian real estate market.

Aggregate data points — such as the countrywide sales volume or the average price of a home — are the sum totals of various, sometimes-opposing market conditions (or the metaphorical fire and ice in Norman’s joke). “When you look at the national average, it’s really obscuring very deep regional differences,” the seasoned economist explains.

The composition of sales across the country does not help. Real estate activity in Canada mainly occurs in a handful of large urban centres throughout just a few regions. “The Canadian national average is heavily influenced by Ontario and B.C., because half of home sales or more are in those two provinces, typically,” says Norman. “So, when Ontario and B.C. are weak, the average national numbers are weak,” she adds.

In extreme cases, these markets can effectively push the national price of a home into negative territory all by themselves. To wit, in September of 2025, the national RPS House Price Index was down 1% compared to the year prior, yet values were up in all of the 13 major census metro areas the index tracks, minus Hamilton, Toronto, and Vancouver. 

The Ontario-B.C. Effect also tends to prop up or inflate the national numbers when markets such as Toronto and Vancouver demonstrate more pricing exuberance.

The top regional trends that are getting lost in the national data

One of the biggest stories that is not immediately apparent from the national headlines of late is the strong and sustained momentum in home values in Quebec — and especially Quebec City.

Canadawide, the RPS House Price Index slipped 4% on a year-over-year basis in April, but it is a very different story in major markets in La Belle Province. 

In stark contrast to the declining national HPI reading, home values are up 12% annually in Quebec City and 8% in Montreal. “What we’re seeing in Quebec City is a city that is very dynamic,” says Norman. “There’s a solid employment situation, and it’s still relatively affordable,” she continues.

Job losses in the wake of the trade war with the U.S. appear to have created economic hurdles in certain places. In fact, home prices are down in 14 of the 19 Canadian housing markets that are most-exposed to U.S. tariffs.

However, in Quebec, mostly younger households and individuals who have not yet reached peak homebuying years have been affected by softer employment conditions, Norman suggests. That has limited the housing market’s exposure to related headwinds, at least for now.

Over the long run, a preponderance of larger, family-sized rentals has also helped maintain the affordability Quebec City’s ownership market is known for — and that is increasingly at risk today.

“You can raise a family in a three-bedroom rental in Quebec City, whereas in Toronto and Vancouver, the availability of those units is much smaller relative to the total market and the vacancy rate is very, very tight,” says Norman. In Toronto, households either compete for limited larger rentals, move outside the city, or purchase. “When you’re forced out of the rental market because what you need isn’t available, it’s going to push up ownership housing [costs],” Norman explains.

Although Quebec City has experienced parabolic price growth in recent years, it maintains an affordability edge over Canada’s other major markets. “The province of Quebec is broadly more affordable than Ontario and B.C., but Montreal to a much lesser extent,” Norman adds. “Affordability is kind of about the national average [in Montreal].”

Also unclear from looking at national prices and sales is the extent to which southern Ontario housing markets are floundering. At -5%, Vancouver’s declines are roughly in line with the national rate of depreciation, but in recent months, Toronto and Hamilton have been seeing values fall by nearly 10% on a year-over-year basis. “Prices are continuing to fall because it’s pretty unaffordable still, and we still have more listings than we have sales,” says Norman. “It’s starting to level out a little bit, but it’s still a buyers’ market.”

Regional affordability trends define the Canadian housing market today 

Overall, affordability — or lack thereof — is the thread that links the regional divergences in the Canadian housing market. “Even though sales are down in the rest of the country [in addition to Toronto and Vancouver], most of the rest of the country is seeing positive price growth,” she notes. Home values in the least affordable markets continue to be hit hardest, while those in lower-priced markets have generally trended upwards.

An exception to the rule is Halifax, where, despite a relatively lower barrier to ownership, local home values have begun declining year-on-year. “Halifax really was a popular destination for international students over the last few years, and that really pushed up the rental demand,” says Norman.

That has changed with the federal government’s recent reduction in the number of international students allowed to enter the country. “We have a lot tighter restrictions on international students… so there’s a lot less demand for rental,” Norman adds. If investors are exiting the market amid slackening demand for rentals, that could have knock-on effects on home prices. “That could be part of what’s happening in Halifax and the East Coast more broadly.”