Navigating Canada's Housing Recovery: Where to Invest in a Diverging Market

The Canadian housing market's recovery is far from uniform. While national inventory levels have surged, creating a buyer's market in many regions, select markets like Trois-Rivières, Quebec, and parts of Alberta are experiencing price resilience driven by supply constraints and rising construction costs. Meanwhile, oversupplied areas like Ottawa face prolonged stagnation. For investors, the key lies in understanding regional divergences—and betting on undervalued markets poised to rebound.

Toronto: A Buyer's Market, but Not All Properties Are Equal

Toronto's housing market epitomizes the divergence between property types. Condos, plagued by a 7.1-month inventory surplus (a 30% year-over-year jump), have seen prices drop 6.4% annually. Buyers now wield significant leverage, with condos under $500K experiencing a 75% sales surge as affordability improves.

However, detached homes in family-friendly neighborhoods—like Oakwood Village—remain a seller's game. These properties saw price-to-list ratios near 105% and quick sales (21–26 days on the market), thanks to limited supply.

Investment Takeaway: Focus on entry-level detached homes in stable neighborhoods, not overbuilt condos. Avoid areas like Downtown West, where tiny condos face prolonged listings.

Calgary: A Transitional Market with Hidden Gems

Calgary's housing market is a study in regional microdynamics. While city-wide sales fell 15.2% annually, prices stabilized or rose in suburbs like Airdrie and Okotoks, where inventory remains tight. Detached homes in these areas held steady at $769K, while North West Calgary saw semi-detached prices climb 3% year-over-year.

The apartment condo segment, however, faces over-supply (3.6 months of inventory), with prices dipping 1% annually.

Investment Takeaway: Prioritize suburban single-family homes and avoid urban condos. Alberta's energy sector rebound and tech sector growth will underpin long-term demand.

Trois-Rivières: The Undervalued Jewel of Quebec

Trois-Rivières is a textbook case of supply-constrained growth. Its median single-family home price rose 14% in 2024 to $343K, outpacing provincial averages. Limited new construction—only a 4% increase in starts—means inventory remains tight, with months of supply at balanced levels (2.6 months).

Why invest here?
- Affordability: Prices are 40% below Montreal's and 30% below Quebec City's, despite strong demand from first-time buyers and retirees.
- Construction Costs: Rising material prices (up 8% in 2024) will support further price growth.
- Economic Tailwinds: Quebec's tech sector expansion and Drummondville's 33% sales surge spill over into Trois-Rivières.

Investment Takeaway: Buy entry-level single-family homes or small income properties. This market is a sleeper hit for long-term capital appreciation.

Avoid Over-Supplied Markets: Ottawa's Cautionary Tale

Ottawa's housing market serves as a warning. A 30% surge in new listings (2024–2025) has pushed inventory to 5.0 months, overwhelming demand. Condos face the worst—prices fell 7% annually, with months of supply hitting 7.1, mirroring Toronto's struggles.

Why it's risky: Ottawa's tech-driven demand is already reflected in prices, and remote work trends could reduce its appeal.

The Playbook for Canadian Housing Investors

1. Target Supply-Constrained Markets:
2. Trois-Rivières: Invest in single-family homes via local developers or REITs.

3. Alberta suburbs: Focus on detached homes in energy/tech hubs like Airdrie.

4. Avoid Overbuilt Segments:

5. Urban condos in Toronto, Calgary, and Ottawa.

6. Leverage Rate Cuts:
   A 1.25% cumulative rate cut by late 2025 (as forecasted) will boost buyer affordability. Time purchases for early 2026 to capitalize on pent-up demand.

7. Diversify with Funds:

8. First National Financial (TSX: FNF): A REIT with exposure to Quebec's growing rental market.
9. BCE Inc. (TSX: BCE): Its fiber-optic rollout supports suburban housing demand.

Final Verdict

The Canadian housing recovery is uneven, but opportunity abounds in markets where supply constraints and construction costs underpin prices. Investors who focus on Trois-Rivières, Alberta suburbs, and stable neighborhoods in Toronto can ride the rebound. Avoid overbuilt urban centers—unless you're prepared for a marathon wait.

The housing market's next chapter is regional. Know your map.