Canada’s housing market was quiet in January, with soft sales but a seasonally strong increase in new listings. A clear discrepancy in performance remains at the regional level, with much of Southern Ontario experiencing soggy markets, while parts of the Prairies, Quebec and Atlantic Canada are firm. We expect modest increases in sales volumes and national prices in 2025 and, while we'll get a more accurate look in the spring, that remains the trend on the ground.
Existing home sales fell 3.3% in seasonally-adjusted terms in January, but were still up a modest 2.9% from year-ago levels. Sales volumes are now running almost right in-line with the 10-year average. Lower mortgage rates and some easing of mortgage rules have not triggered a notable jump in activity, although economic uncertainty and cold weather might be acting as offsets.
New listings are still elevated and jumped 11% (seasonally-adjusted) in January, or almost 23% from a year ago. While the months' supply of homes for sale rose to 4.2 from 3.9 in December, that's not a major overhang of inventory at the national level. The national sales-to-new listings ratio fell sharply, but is still in balanced territory at 49.3%.
Balanced overall market conditions leave price trends very stable. The MLS benchmark price was little changed in January and was up a very modest 0.1% from a year ago. In fact, prices at the national level have now barely budged since the end of 2023—as it happens, Bank of Canada rate cuts haven't driven prices higher, but they've kept them from falling further.
Conditions continue to vary greatly by region and segment. The real weak spot remains Southern Ontario, where buyers' markets (or close to it) are evident across a number of cities. In Toronto, the glut of condos hitting the resale market is clearly marking one of the weakest spots in Canadian real estate, with prices down 3.4% y/y, outpaced to the downside only by condos in Hamilton and Kitchener-Waterloo. Single-detached prices in Toronto remain modestly above year-ago levels.
Vancouver and some other markets across B.C. have also softened in recent months, as a record seasonally-adjusted number of new listings hit the market across the province in January.
On the flip side, markets in Quebec and further east are tight almost across the board as steadily rising sales outpace increases in new listings.
Calgary, Edmonton, Regina and Winnipeg also all see sellers’ markets and continue to outperform national averages for market balance and price growth. Prices in these markets have all returned to record highs relative to the recent correction and, unlike markets like Toronto and Vancouver, new listings are very stable.
The big takeaway here is that sales seem to be stabilizing across much of the country alongside lower borrowing costs. However, supply conditions are starting to vary noticeably. The weakest markets are now those that previously saw a large concentration of investors, typically for new condos, where completions are coming to market in a much softer environment. Look for condo markets in these areas to continue underperforming.
In a separate release (February 17th), Canadian housing starts rose slightly to 239.7k annualized units in January, maintaining the solid and steady level of new construction activity that marked the second half of 2024. Apartments and purpose-built rentals continued to drive activity. Interestingly enough, asking rent is now falling across a number of Canadian cities, and even the January CPI report showed the first month-over-month decline in Canadian rent since August 2022—there is likely more where that came from.