Monday Market Minute | Jun 16, 2025

Housing recovery broadens beyond Toronto and Vancouver to secondary markets

What Moved

CREA's May data revealed an important shift: while Toronto and Vancouver continued their gradual recovery, the strongest price gains were in secondary markets. Calgary posted a 9.2% year-over-year price increase. Ottawa, Halifax, and Kitchener-Waterloo all showed double-digit sales volume growth. The pattern reflected the durable influence of remote work on residential preferences, combined with relative affordability — a single-family home in Calgary cost less than a condo in downtown Toronto.

Why It Matters

The geographic broadening of the housing recovery created new opportunities for private real estate investors. MIC lenders and residential developers with exposure beyond the Big Two metros were outperforming. Land assembly and low-rise development in secondary markets offered higher risk-adjusted returns than competing with institutional capital in Toronto and Vancouver. For exempt-market real estate funds, the geographic diversification reduced concentration risk — a portfolio spread across six or seven Canadian markets was structurally more resilient than one dependent on a single city's dynamics.

Signal to Watch

Immigration policy tightening, announced earlier in the year, could dampen demand in secondary markets that had relied on newcomer population growth for housing absorption. The impact would take 6-12 months to materialize.

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