Housing values across Canada declined by 2 per cent in January compared to the year before, according to new data.COLE BURSTON/The Canadian Press
Even with lower interest rates, price growth in major Canadian real estate markets is diverging as cheaper regions post bigger gains than more expensive cities.
The biggest example of the divergence is in Quebec City, Canada’s strongest market, with a 14-per-cent increase year-over-year in housing values in January. An inventory drop has continued to put upward pressure on prices.
The data on housing valuations comes from a monthly report from Wahi, a digital real estate platform, and Real Property Solutions, a Canadian property valuation service provider.
On the other hand, Victoria and Toronto were some of the weakest markets in the country in January, as valuations fell and appeared to get little relief from interest rate decreases throughout 2025.
Overall, housing values across the country declined by 2 per cent in January compared to the year before, as economic concerns continue to hold buyers on the sidelines.
We spoke to realtors to look at the Quebec City, Victoria and Toronto markets and to understand why they performed so far outside the national average.
Quebec City: 14-per-cent increase
Quebec City has been Canada’s hottest real estate market for months, and that only continued in the first month of 2026 as it posted 14-per-cent growth year-over-year.
Canada’s second-hottest market was Regina, with 11-per-cent growth.
Tom Donovan, a real estate broker with Re/Max Accés in Quebec City, said there were just 1,800 homes available on the market in January – a 26-per-cent decrease from a year prior.
“It’s historically low inventory, and it’s just been going down and down,” said Mr. Donovan.
“We’re feeling it, every time we list a house, one out of three sales go above list price.”
As a result, he only expects Quebec City’s outsized growth to continue in 2026.
Mr. Donovan added that interest-rate declines were able to help a growing number of first-time homebuyers jump into the market.
Another local factor driving down inventory is that many retirees and empty-nesters in large single-family homes are unwilling to sell their properties because of inflated prices for smaller homes and condominiums.
That has further driven down the availability of larger properties in the city.
Victoria: 5-per-cent decrease
Victoria overtook Vancouver in January to become British Columbia’s weakest market, according to Wahi-RPS’s data on housing values.
Victoria’s 5-per-cent decrease compares to just a 4-per-cent decrease in Vancouver.
However, Victoria Real Estate Board chair Fergus Kyne said he’s optimistic that the city’s market will stabilize in 2026.
Sales remained relatively stable in Victoria from 2024 to 2025, with an average of roughly 6,900 homes sold in the region in each of those years. That differs from larger cities such as Toronto that have seen sales volumes fall and inventory climb in that time.
Interest-rate cuts haven’t helped the Victoria market pick up steam yet, but Mr. Kyne said he thinks it will become a factor once buyers realize that there aren’t more cuts coming.
“Once they adjust to this fact, we may see people moving past their indecision or uncertainty and transacting,” he said.
The number of transactions is expected to increase in 2026, but Mr. Kyne said he doesn’t expect prices will grow unless inventory numbers drop significantly.
Toronto: 6-per-cent decrease
Canada’s largest city also saw some of the largest decreases in housing prices in January.
RPS-Wahi economist Ryan McLaughlin said the interest rate environment hasn’t helped Toronto’s battered real estate market because the forces of supply and demand are not working in its favour.
Population decline within Canada and interprovincial migration out of Ontario means that demand is only going down, he said. Meanwhile, supply is increasing as housing completions continue to roll in. Prices are also higher than what most buyers can stomach during shaky economic times in Canada.
“The fundamentals of the market are not in its favour,” said Mr. McLaughlin.
As a result, Mr. McLaughlin said organizations such as the Toronto Regional Real Estate Board are forecasting that prices will continue to decline slightly throughout 2026.
