The gap between supply and demand widened across most large Canadian housing markets in January, as cautious buyers stayed on the sidelines and inventories continued to climb, according to a new report from RBC Economics.

“Potential buyers remained cautious despite elevated inventory giving them the upper hand,” said Rachel Battaglia, an economist at RBC.

Heavy snowfall and stormy weather across parts of the country helped suppress demand, while an unusual calendar with a higher number of working days last month compared with January 2025 may have exaggerated monthly trends, said RBC.

Accounting for those factors, demand still fell sharply in several markets, particularly Vancouver and the Fraser Valley.

Edmonton, Winnipeg and Saskatoon also posted notably weak results, while Toronto and Montreal continued to soften. Calgary and Regina were among the few markets to record increased buying activity.

Inventories, meanwhile, continued to rise in most regions, putting renewed pressure on prices. Several markets recorded their largest year-over-year price declines in years.

Toronto Still Under Pressure

The Greater Toronto Area remained soft in January, with home resales down 9.9% on a seasonally adjusted basis from December.

The decline marked the fourth consecutive monthly drop and the steepest pullback in nearly a year, extending the challenging conditions that shaped much of 2025.

Ontario’s severe winter weather, including one of the largest snowfalls in years, likely contributed to the slowdown as buyers faced little urgency in a market already favouring them, said the report.

New listings rose modestly, keeping inventory higher than relative historical norms. As a result, price pressures persisted.

The MLS Composite Home Price Index in the Toronto area fell 8% year-over-year in January, the 22nd consecutive annual decline and the sharpest drop in three years.

Montreal Cools as Balance Returns

In the Montreal area, sales were estimated to have slipped 1.4% from December, extending the late-2025 slowdown.

A surge in new listings, driven largely by condominiums, has brought the market closer to balance, with the sales-to-new listings ratio settling into a balance.

Price growth has already moderated. Annual gains in median single-family home prices slowed significantly, while condo prices rose just 2% from a year earlier.

Despite January’s increase, active listings remain relatively limited, which could support stronger price growth later in the year if buyer confidence improves.

Vancouver Momentum Stalls

January marked a sharp reversal in Vancouver, where sales plunged nearly 30% from December, erasing modest gains posted late last year.

Resales remain well below the 10-year seasonal average, while listings sit well above historical norms, a dynamic that continues to favour buyers.

Greater Vancouver’s benchmark price declined 5.7% year-over-year, extending nearly a year of annual declines.

Calgary Sees Higher Sales, Rising Supply

Calgary recorded a 7.3% increase in sales in January, but the improvement was overshadowed by an even larger jump in new listings.

Elevated inventory continues to weigh on prices, with the composite benchmark down 4.7% from a year earlier. Detached homes have held up better than higher-density units.

With significant residential construction still underway, RBC expects supply to remain elevated, limiting any shift back toward seller-friendly conditions without a stronger rebound in demand.

RBC : Prices Falling Across Canadian Cities as Inventory Builds by Courtney Zwicker | REM Real Estate Magazine