Canadian Housing Monitor: November 2024
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We Have a Pulse
Canada’s housing market is finding some life, with activity picking up on the back of cumulative Bank of Canada rate cuts and more available inventory. Sales volumes have bounced from last year’s lows, prices have stabilized across many regions and outright buyers' markets are disappearing. Watch for further BoC easing and easier mortgage rules (as of Dec. 15th) to keep the market supported into 2025, even if the acceleration isn't as dramatic as seen in past cycles.
Canadian existing home sales jumped 7.7% in seasonally-adjusted terms in October, and were up a strong 30% from year-ago levels. To be fair, last October and November were very soft after accounting for seasonality, but it’s clear that activity has risen with more selection and lower borrowing costs. Price reductions across some segments have also allowed the market to clear better as the ‘bid-ask’ spread narrows. Meantime, new listings slipped 3.5% in October (seasonally adjusted) but were still up 7.4% from a year ago. Listings flow is firm relative to past-decade norms, with October’s tally running about 6% above the 10-year average. But, the outstanding inventory on the market has remained relatively stable on a national basis.
The months’ supply of homes for sale fell to 3.7 in October alongside the pickup in sales. As such, the market balance remains firm with the sales-to-new listings ratio jumping to 58% in the month, still in balanced territory, but clearly tightening from the lows of the past year. Balanced overall market conditions leave price trends going sideways, with the MLS Benchmark price still down 2.9% in the past year, and holding flat in recent months. Prices are effectively unchanged over the latest 3- and 6-month periods—a perfectly soft landing so far.
Market conditions continue to vary by region and segment, although very few outright buyers’ markets remain. The Prairies and much of Atlantic Canada continue to stand out with the tightest markets in Canada. Edmonton, Regina and Winnipeg all sport strong sellers’ markets even as Calgary has softened somewhat. Vancouver and Montreal remain well-balanced, if not showing some signs of firming in recent months. And, while Southern Ontario cities such as Windsor, Niagara and Guelph remain soft relative to the rest of the country, conditions in those markets have also tightened back into balanced territory.
Toronto remains the really interesting story, where condo supply continues to saturate the market, even as scarcer single-detached housing has tempered the deterioration in the overall numbers. The sales-to-new listings ratio in the city bounced to 44.8 in October, at the low end of balanced territory and still the toughest market among Canada’s major cities (namely for condos). Condo prices in the CMA are now down 6.2% y/y, the worst performance across the major segments/locations that we track, while Toronto single-detached prices are down a more modest 2.6% y/y. Condo investors remain absent, and many have inventory (e.g., presales) to get rid of.
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Robert Kavcic
Director and Senior Economist
Robert has been with the Bank of Montreal since 2006. He plays a key role in analyzing economic, fiscal and real estate trends in Canada. Robert regularly contribut…(..)
View Full Profile >We Have a Pulse
Canada’s housing market is finding some life, with activity picking up on the back of cumulative Bank of Canada rate cuts and more available inventory. Sales volumes have bounced from last year’s lows, prices have stabilized across many regions and outright buyers' markets are disappearing. Watch for further BoC easing and easier mortgage rules (as of Dec. 15th) to keep the market supported into 2025, even if the acceleration isn't as dramatic as seen in past cycles.
Canadian existing home sales jumped 7.7% in seasonally-adjusted terms in October, and were up a strong 30% from year-ago levels. To be fair, last October and November were very soft after accounting for seasonality, but it’s clear that activity has risen with more selection and lower borrowing costs. Price reductions across some segments have also allowed the market to clear better as the ‘bid-ask’ spread narrows. Meantime, new listings slipped 3.5% in October (seasonally adjusted) but were still up 7.4% from a year ago. Listings flow is firm relative to past-decade norms, with October’s tally running about 6% above the 10-year average. But, the outstanding inventory on the market has remained relatively stable on a national basis.
The months’ supply of homes for sale fell to 3.7 in October alongside the pickup in sales. As such, the market balance remains firm with the sales-to-new listings ratio jumping to 58% in the month, still in balanced territory, but clearly tightening from the lows of the past year. Balanced overall market conditions leave price trends going sideways, with the MLS Benchmark price still down 2.9% in the past year, and holding flat in recent months. Prices are effectively unchanged over the latest 3- and 6-month periods—a perfectly soft landing so far.
Market conditions continue to vary by region and segment, although very few outright buyers’ markets remain. The Prairies and much of Atlantic Canada continue to stand out with the tightest markets in Canada. Edmonton, Regina and Winnipeg all sport strong sellers’ markets even as Calgary has softened somewhat. Vancouver and Montreal remain well-balanced, if not showing some signs of firming in recent months. And, while Southern Ontario cities such as Windsor, Niagara and Guelph remain soft relative to the rest of the country, conditions in those markets have also tightened back into balanced territory.
Toronto remains the really interesting story, where condo supply continues to saturate the market, even as scarcer single-detached housing has tempered the deterioration in the overall numbers. The sales-to-new listings ratio in the city bounced to 44.8 in October, at the low end of balanced territory and still the toughest market among Canada’s major cities (namely for condos). Condo prices in the CMA are now down 6.2% y/y, the worst performance across the major segments/locations that we track, while Toronto single-detached prices are down a more modest 2.6% y/y. Condo investors remain absent, and many have inventory (e.g., presales) to get rid of.
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