Home sales have declined nationally but Quebec was an outlier, with transactions in the province rising by 10 per cent.Christinne Muschi/The Canadian Press
There were sharp regional contrasts in Canada’s housing market in April, 2025, underscoring a growing disconnect between markets in Ontario and B.C. and those in the rest of Canada.
The average national home price, MLS benchmark price and seasonally adjusted sales dropped 3.9 per cent, 3.6 per cent and 7.5 per cent year-over-year, respectively, driven by cooling demand in Ontario and British Columbia.
While average home prices in Ontario and B.C. have returned to early 2021 levels, at least one of the average or benchmark prices in five other provinces has reached an all-time high – with Quebec and Nova Scotia setting new records in both metrics.
Economic conditions not the key factor
While the national economy shows signs of strain, including rising unemployment, these factors don’t fully explain the market divergence. In April, Quebec’s unemployment rate was 6 per cent, only slightly better than B.C. at 6.2 per cent and Ontario at 7.8 per cent.
The modest difference in unemployment rates between Quebec and B.C. suggests that other forces are driving the downturn in Ontario and B.C.
Affordability is the driving factor
The most likely culprit is affordability, especially given that interest rates are unlikely to return to the ultra-low levels of 2008 to 2021 any time soon. Median gross personal incomes across Ontario, Quebec, B.C. and Alberta range narrowly from $45,300 to $47,700, as of 2023.
Yet average and benchmark home prices in Ontario and B.C. are 55 per cent to 85 per cent higher than in Alberta and Quebec, highlighting a significant affordability gap as measured by the home-price-to-income ratio. This imbalance is dampening demand and prompting price corrections in Canada’s most expensive markets.
Liquidity drops in key provinces
Beyond pricing, the number of transactions has also declined nationally. Sales in Ontario, B.C., Alberta and Saskatchewan declined by double-digits on a year-over-year basis. The most notable outlier was Quebec, where transactions rose by 10 per cent.
In Ontario and B.C., transactions fell by 20.2 per cent and 14.6 per cent, respectively, as buyers and sellers appeared unwilling to proceed at current price levels.
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Future prices
The trajectory of the housing market in Canada in the coming months will hinge on several key factors: interest rates, employment trends, market sentiment and population growth.
While the Bank of Canada is expected to make one or two additional rate cuts this year, the broader economic outlook remains clouded by uncertainty.
A slowdown in population growth and rising unemployment – driven in part by newly imposed tariffs and uncertainty surrounding potential future tariffs – could pressure prices lower.
This is particularly true in Ontario and B.C., where housing markets appear more vulnerable. Even in provinces currently experiencing growth, such as Quebec, momentum may be difficult to sustain if economic troubles persist or worsen.
Hanif Bayat, PhD, is the CEO and founder of WOWA.ca, a Canadian personal finance platform.
