Posthaste: Canada’s home prices have now been falling for four years — and haven’t hit bottom yet

Canadian

home prices

have been grinding lower in this country for four years now since the heady days of the pandemic boom — and March brought no reprieve.

Sales in what normally marks the beginning of the busiest real estate season were the weakest in 17 years, and prices slipped another 0.4 per cent from the month before, said Robert Hogue, assistant chief economist at

Royal Bank of Canada

.

“The national composite MLS Home Price Index remains firmly on a four year-long decline, down 4.7 per cent from a year ago and 20 per cent from the cyclical peak in early-2022,” he said in a report after

national housing data

was released last week.

Economic uncertainty from Trump’s trade war and geopolitical conflicts has been keeping buyers back for some time, but now higher

mortgage rates

are adding a further disincentive.

Fixed rates have been rising as the spike in

oil prices

from the Iran war push up government bond yields and this recent rebound in borrowing costs suggest home prices will fall further in coming months, said Bradley Saunders, North America economist for Capital Economics.

“Things are likely to get worse before they get better,” he said.

The rise in government bond yields has pushed the average five-year fixed mortgage rate above 4 per cent and further gains are possible, he said.

Rebounding rates led the

Canadian Real Estate Association

to downgrade its sales and price forecast this past week. It now expects home sales to rise just one per cent in 2026, down from its January forecast of 5.1 per cent.

The national average home price forecast was lowered to $688,955, compared with $698,881 projected in January.

Ontario and British Columbia continue to suffer the worst of the correction. The home price index is down 7.4 per cent from a year ago in the Greater Toronto Area and down 6.8 per cent in Vancouver, said Hogue’s report.

And declines are not limited to these major markets. In Kitchener-Waterloo prices are down 8.6 per cent, in Barrie 8.4 per cent and London, 7.1 per cent. In B.C.’s Fraser Valley prices are off 7.5 per cent. Almost all of these markets saw further monthly declines in March, said Hogue.

Alberta has not been spared. The home price index is down almost 3 per cent in both Edmonton and Calgary.

Prices are rising in some markets where supply is tighter. Prices gained more than 10 per cent in Quebec City, 11 per cent in Moncton and over 9 per cent in Newfoundland and Labrador.

Hogue says there’s still hope of recovery if lower prices lure more buyers and inventory shrinks.

But there’s also a growing risk that global conflicts, high energy prices and fragile job markets prolong the slump, he said.

Spring is traditionally the busiest time for real estate and this year, the stakes couldn’t be higher. Follow our Spring Real Estate Survival Guide series as we unpack some of the most pressing questions buyers and sellers are grappling with, plus expert advice on how to navigate the reality of a slower market.

Read the series here

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Economies might have recovered from the COVID-19 pandemic, but fiscal positions have not, says the

International Monetary Fund.

In fact, in many countries public finances are weaker than before the pandemic.

Despite robust global growth in 2025, governments made little progress on repairing budgets battered by the pandemic, the following inflation spike and trade disruptions.

Now soaring energy and food prices, tighter financial conditions, and heightened uncertainty arising from the Middle East war are once again prompting calls for fiscal support. And public finances are already strained.

“The numbers are stark,” said the IMF. Gross

public debt

has hit 94 per cent of gross domestic product and is projected to reach 100 per cent by 2029 — a year earlier than predicted.

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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.

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McLister on mortgages

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

mortgage rate page

for Canada’s lowest national mortgage rates, updated daily.

Financial Post on YouTube

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 

posthaste@postmedia.com

.

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