Canada's housing market remains on a divergent path, as local conditions fuel an uneven pace of recovery, according to RBC Economics in a late Thursday note.
Data reflected a divided housing market in July, marked by recovery in certain areas, weakness in others and emerging signs of stability across Canada, wrote RBC Assistant Chief Economist Robert Hogue in the note.
Market performance diverged across Canada, with early recovery emerging in Toronto and Ottawa, renewed challenges affecting Vancouver, Winnipeg and Hamilton, and signs of stabilization appearing in Edmonton, Halifax and Montreal. Calgary continued to contend with supply pressures, while the Fraser Valley remained in a sustained downturn.
The uneven performance across markets highlights the influence of local factors, including affordability, consumer sentiment, population changes, employment conditions and available housing supply. At the same time, national factors such as interest rates and immigration policies are having varied impacts across local housing markets, added RBC.
More balanced inventory levels in Ontario and British Columbia are emerging as a favorable trend, creating conditions that could support market balance and steady home values over time, according to the bank.
"Generally, we expect improving affordability and rebuilding confidence will progressively unlock pent-up demand, and support a recovery in Canada," said Hogue. "But, significant unevenness is likely to persist."