The quick read: buyers came back in Q2, prices stopped falling in June, and the Bank of Canada stayed on hold. Underneath that calmer surface, arrears are still climbing and condo values are still repricing. Here is what the quarter means for your book.

The quarter in five numbers

The national picture: a floor is forming

June was the first month since January 2025 that the national MLS Home Price Index did not fall. The year-over-year decline narrowed to 3.6%, the smallest gap since last October, and the national average price edged up 0.5% to $696,078. One flat month is not a recovery, but it is the strongest signal in eighteen months that the repricing is running out of steam.

Demand did the heavy lifting. Seasonally adjusted sales finished the quarter about 7% above March, new listings fell for a second straight month, and the sales-to-new-listings ratio crossed back above 50% for the first time this year. With 4.8 months of inventory nationally, a properly priced property still sells in a normal season. For a lender, that combination matters more than any single price print: it means your collateral is marketable, and the conditions that were eroding it are tightening rather than loosening.

One more national note: builders are pulling back. June housing starts fell 13% year over year as high costs and unsold new inventory caught up with the industry. That supports resale values over the medium term, and it argues for extra care on construction and land files right now.

Rates and renewals: the pressure is easing, not gone

The Bank of Canada held at 2.25% through the quarter and again on July 15, leaving the policy rate 50 bps below where it sat a year ago. Posted 1-year mortgage rates averaged 5.49% in Q2, down 65 bps year over year, and 5-year posted rates eased to 6.09%. The July Monetary Policy Report describes a weak economy that is improving, with inflation projected near 2%. The next decision lands September 2, and rate hikes now look much less likely than they did in the spring.

For your renewal book, that is meaningful relief. Borrowers requalify against lower posted rates, payment shock at reset keeps shrinking, and an alt-A or private borrower's path back to an institutional lender is a workable takeout again. The renewal wave itself peaked in 2025, so expect renewal-driven origination flow to gradually thin through the year. The caution: borrowers who locked in low fixed rates between 2021 and 2023 still renew into materially higher costs, even after the relief.

A market-by-market look

Metro Vancouver

Sales rose 9.6% year over year in June with gains across every home type, a pattern GVR calls rare in recent years. Values have not followed yet: the composite benchmark of $1,099,100 is down 6.0% year over year, and standing inventory sits about 30% above its 10-year average. Plan on slower, price-sensitive exits until that inventory clears.

Toronto and the GTA

Sales jumped 9.4% year over year while new listings fell 12.9%, and TRREB expects the second half to keep tightening. The benchmark still sits 5.4% below last June, and condo apartments are the soft spot at 8.2% below. If your GTA exposure leans condo, this is the segment to watch most closely.

Calgary and Alberta

Alberta's average price reached $541,778, up 2.8% year over year, with Calgary up 4% at $669,519. Supply is loosening from tight levels (2.84 months provincially) but conditions still lean toward sellers. Apartments are the exception, with sales down 16% and over four months of supply.

Montreal

Q2 sales fell 7% year over year, but prices kept climbing: the single-family median hit $645,000 (up 3%) and every single-family price band remains in seller's territory. Single-family homes still sell in about a month. Condos are slower, at 48 days on market and rising.

Winnipeg

June was the first month of 2026 to beat the prior year, and the detached average of $483,910 set a June record. Nearly half of detached sales cleared between $300,000 and $500,000, exactly the band where most private books lend, which makes Winnipeg some of the most liquid collateral in this update.

What this means for your lending book

Loan-to-value headroom. Apply the year's price moves to a loan written at 80% LTV in June 2025 and the effective LTV today is about 83% nationally, 84.6% in the GTA and 85.1% in Metro Vancouver. The same loan in Calgary, Montreal or Winnipeg gained cushion. These are illustrations on published benchmarks, not appraisals, and that is the point: where values have moved this much, a current appraisal is not optional.

Liquidity. National conditions support orderly exits, and Alberta, Quebec single-family and Winnipeg's mid-band are the most liquid collateral in this report. Budget three to four months for a clean GTA exit (longer for condos) and price Vancouver dispositions against a heavy inventory backdrop.

Arrears. The national 90+ day arrears rate reached 0.28% in Q1 2026, up from 0.24% in Q4 2025 and the highest since 2019, though still below pre-pandemic levels. Saskatchewan (0.49%), Manitoba (0.35%) and Ontario (0.31%) run highest; Quebec is lowest at 0.19%. Growth is concentrated where equity is thinnest: Toronto delinquencies are up 45% year over year and Ontario up 35%. Stress-test your GTA and Vancouver renewals hardest, because thin cushions and rising arrears overlap there.

What we are watching in Q3

• September 2, Bank of Canada. A hold or cut supports fall demand and renewal affordability. Any surprise tightening hits refinance exits first.
• The sales-to-new-listings ratio. If it holds above 50% through August (next CREA release: August 18), the fall market TRREB and GVR expect is on track.
• The inventory turn. Falling active listings alongside rising sales would firm the price floor and stop LTV drift. It is the single best collateral signal this quarter.
• Arrears data for the first half. CMHC's baseline has arrears rising moderately into late 2026, with 2021 to 2022 origination cohorts the stress point at renewal.

The bottom line

Underwrite to the market, not the national average. Values are finding a floor, demand is returning, and rates are on your side for the first time in years. But the correction already happened to your existing book in BC and Ontario, and the arrears data says some borrowers are still absorbing it. Current appraisals, no appreciation assumptions, and market-specific exit timelines will carry you through the turn.

Collateral decisions are only as good as the valuation behind them. If you want current, defensible appraisals on the files you are watching, talk to the Value Connect team.

Sources: TRREB Market Watch (June 2026); Greater Vancouver REALTORS Stats Package (June 2026); Province of Alberta Monthly Statistics, Pillar 9 (June 2026); Winnipeg Regional Real Estate Board Market Analysis (June 2026); QPAREB Residential Barometer, Province of Quebec (Q2 2026); CREA national statistics (July 15, 2026); Bank of Canada policy rate and Monetary Policy Report (July 2026); CMHC Residential Mortgage Industry Report Spring 2026 and housing starts (June 2026); Q1 2026 arrears figures supplied by Value Connect. This update is for information only and is not financial or lending advice.