Canada’s housing market is showing a growing regional divide, with home prices declining in several major provinces while continuing to climb in others, according to recent housing reports.
A monthly housing activity report from personal finance platform WOWA indicates that benchmark home prices are falling in Ontario, British Columbia, and Alberta, while several eastern provinces including Quebec, Saskatchewan, and the Maritime region are still seeing steady price increases.
The trend highlights a sharp contrast in housing market conditions across the country. While some of Canada’s largest housing markets are cooling after years of rapid growth, others are gaining momentum as buyers seek more affordable alternatives.
The provinces with the highest housing costs Ontario and British Columbia have recorded the largest year-over-year price declines.
Ontario saw the steepest drop, with benchmark home prices falling 7 percent to an average of $745,800. British Columbia followed with a 4.9 percent decline, although it still remains the most expensive province for housing, with an average benchmark price of $886,200.
In Alberta, prices also slipped, dropping 3.1 percent year over year to approximately $499,300 as of January 2026.
Analysts say much of the slowdown is being driven by corrections in the country’s two most expensive housing markets Toronto and Vancouver. In January 2026, the benchmark price in Greater Vancouver stood at $1,101,900, while homes in the Greater Toronto Area averaged $935,200.
Year-over-year prices declined 5.7 percent in Vancouver and 8.1 percent in the GTA, reflecting what experts describe as a necessary adjustment after years of rapid price increases.
The Canada Mortgage and Housing Corporation (CMHC) has also reported uneven housing activity across the country. Its Housing Market Outlook 2026 suggests construction and home sales in Ontario and British Columbia are expected to remain below their 10-year averages.
However, the agency predicts that sales could temporarily rebound in 2026, largely due to pent-up demand in these provinces after several years of weak activity.
Despite that potential rebound, analysts say high housing costs are still limiting how many Canadians can enter the market.
Eric Miller, president of the Rideau Potomac Strategy Group, said affordability has become a major barrier.
“There are simply not that many Canadians who can afford homes at current prices,” Miller noted, particularly in expensive cities such as Toronto and Vancouver.
Changes in immigration and population patterns have also influenced regional housing demand.
Canada’s population grew by more than three million people between 2020 and 2025, placing significant pressure on housing supply nationwide. However, the federal government began reducing immigration targets in late 2024.
In the first three quarters of 2025, Ontario and British Columbia recorded population declines driven by immigration outflows. Ontario’s population dropped by 64,178, while B.C. lost 16,788 residents. Meanwhile, most other provinces continued to experience population growth.
Experts say this shift has contributed to weaker housing demand in Canada’s largest markets.
While western and central Canada see cooling prices, several eastern provinces continue to experience strong growth.
According to WOWA’s report, Newfoundland and Labrador posted the biggest annual increase, with benchmark home prices rising 9.7 percent to $334,000.
Prices also climbed in Quebec – up 7.1 percent to $535,000, Saskatchewan – up 5.6 percent to $359,500, New Brunswick – up 4.8 percent to $329,400, Prince Edward Island – up 1.7 percent to $371,700 and Nova Scotia – up 0.6 percent to $417,700.
Experts say several factors are driving price increases in these regions, including lower housing costs, rising migration from other provinces, and geographic limits on housing development.
For example, the city of Halifax faces natural land constraints because it sits on a peninsula surrounded by water, restricting how much new housing can be built. Similar geographic limitations exist in parts of Montreal, which has also seen strong demand.
Speculative investment activity in some eastern markets has further pushed prices higher, as outside buyers purchase properties as long-term investments rather than primary residences.
Overall, Canada’s housing market remains subdued nationally, but regional differences are becoming more pronounced.
While the country’s most expensive housing markets adjust after years of rapid growth, smaller and more affordable provinces are seeing continued demand creating a split housing landscape across Canada as the market heads deeper into 2026.
