Economists are not known for providing succinct responses. It’s something we can work on. But perhaps some grace can be extended when we get the question: “How’s Canada’s housing market doing?”

The truth is, it depends on where you look. In some locations, the housing market looks pretty hot. In other places, it’s very cold.

Averages are great, except when they mask massive variation (a classic joke is that an economist will say a person is feeling comfortable if their head is in the oven, but their feet are in ice).

What better way to make this point than a scatter plot (see below). It shows massive variation in price changes depending on the market, with cheaper markets tending to see larger gains last year.  

It is a version of the ‘chasing affordability’ thesis we’ve had for some time. The idea is that Canadians are extremely sensitive to cost of living considerations these days, and that sensitivity is driving patterns in interprovincial migration and the housing market.

The more classic bar chart below makes a similar point. In the high-priced markets of B.C. and Ontario, you see buyer’s market conditions with ratios south of 40%, and more elevated inventories of homes. In every other province, the housing market is in balanced-to-seller’s territory (with ratios around 60% or higher).   

Caveats aside, I am going out on a limb to make some general points about the state of national housing. The increase in interest rates from the COVID lows has put a damper on things. Even though rates have fallen, many households are renewing mortgages at higher rates than in the past (the so-called mortgage cliff, or plateau). Beyond interest rates, a few other big factors—slowing population, a sluggish economy and geopolitical uncertainty (previously tariffs, now Iran)—are weighing on sales activity.

Turning to regional conditions, ‘chasing affordability’ seems to be a prevailing theme. In addition to the (hopefully) convincing scatter plot above, perhaps a simple comparison can help.

Two weeks ago I was in Saskatoon for an ATB Wealth event, where real estate agents were telling me that homes were selling quickly. Sure enough, the stats show that this market has been in seller’s territory (a sales-to-listings ratio above 60%) since May 2023. Benchmark prices have surged 13% since January 2024 to $426K in February 2026—yet still well below other Canadian markets.

Toronto, by comparison, with its massive condo build in the lead up to rate hikes, has seen a steep correction. The Greater Toronto area sales-to-listings ratio was 34% in February. Its benchmark prices are 26% below peak levels in February 2022 (just before rate hikes), yet still remain elevated at $932K.

Beyond affordability, general economic conditions also factor in. Saskatchewan’s economy and labour market have fared much better during the trade war than Ontario’s, with its highly exposed manufacturing sector.

Turning to Alberta, we did see the chasing affordability theme play out in 2022-2024 as Canadians flocked to the province. But more recently, the market has cooled due to a rapid supply response (home starts hit record levels last year) and a slowdown in population growth.

Even general comments about Alberta’s housing market can be misleading. Inside Alberta, Calgary’s market has cooled after a period of rapid growth, with prices down 3.4% from the December 2024 peak. Edmonton, with a lag, caught Calgary’s real estate fever, though conditions have cooled more recently.

Outside the two largest Alberta cities, you see more resilient markets. Medicine Hat, Lethbridge, Grande Prairie and Lloydminster have seen strong price gains over the last year (see chart). Fort McMurray, which has been in correction mode since 2015, has seen prices stabilize and start to increase.

It also depends on the housing type. There has been more of a correction in apartment prices (particularly in Calgary) than in single-detached prices, corresponding with the rapid addition of multi-family dwellings during this cycle.

What’s next? In December, we put out our view on Alberta’s housing market in 2026 working with ATB’s real estate team. Our rebalancing theme remains largely intact.

Builders have been playing catch up to record population growth and new supply has come on the market. Population growth has slowed significantly and inventory has increased in the major cities. As a result, we expect some downward pressure on rents and prices to continue through the first half as new supply continues to come online before stabilizing. In contrast, more stability will be found in single-family housing, where fewer new homes have been added.

On a positive note, we expect that many homebuyers waiting on the sidelines for lower rates may enter the market given expectations that the Bank of Canada is done cutting and the recent jump in 5-year yields. Ongoing interprovincial migration also provides a tailwind for the Alberta market. In general, expect to see more price convergence in housing markets—that is expensive markets getting slightly cheaper, but less-expensive markets becoming more expensive.

Overall, we expect a year of modest price growth this year in Alberta, with single family outperforming, consistent with the latest projections from the Canadian Real Estate Association and Calgary Real Estate Board.

Bottom line: Next time someone asks you about the state of Canada’s housing market, tell them you need at least five minutes. Grab a coffee and talk about it. And make sure to bring the scatter plot!

Answer to the previous trivia question: The Moon's average distance from the Earth is 384,399 km.

Today’s trivia question: Why is the current moon exploration program named Artemis?