What You Need to Know about Canadian Real Estate This Summer

It’s been an up-and-down (but mostly down) season for Canadian housing. Here’s what to make of the latest data from the Canadian Real Estate Association.

By Josh Sherman | 4 minute read

Recent home-sales data from the Canadian Real Estate Association suggest the real estate market cooled as the mercury rose.

It looks like the Canadian housing market is on vacation.

After sprouting some green shoots to start the summer with an uptick in home sales, the latest data from the Canadian Real Estate Association suggests the housing market wilted in July.

“Buyers didn’t come to market with the same enthusiasm seen in the past this July. They retreated back to the sidelines after a solid sales pickup in June,” suggests RBC Economist Rachel Battaglia in a response to the data.

Below, Wahi rounds up commentary from Battaglia and other market-watchers to keep you posted on the latest developments in Canadian real estate. Here’s what you need to know as we enter the last leg of summer.

1. Interest rates have moved lower, but so have national home sales — for now.
 

The Bank of Canada followed its June rate cut by hacking another 25 basis points off the overnight rate towards the end of July. However, many potential homebuyers appeared to sit tight.

Countrywide, home sales declined 0.7% on a month-over-month basis, remaining 9% short of pre-pandemic activity, notes a report from TD Economics. On a seasonally adjusted basis, 38,626 homes changed hands across Canada last month, CREA indicates.

Although interest rates are lower, they’re still above historical norms, and high home prices remain a barrier in many markets, suggests a separate report from National Bank. “A downturn in activity might seem surprising in the light of two recent interest rate cuts and record population growth,” the report reads. “However, despite these favourable factors and renewed buyer confidence, affordability challenges remain as interest rates are still deep in restrictive territory.”

Given the BoC’s latest rate cut was on July 24, more time is needed to see its impact on activity. “August’s data will be telling, given that rates have continued their decline into this month,” according to the TD Economics commentary. 

2. Canadian homebuyers have a lot more choice this summer. 

This spring, the number of homes listed for sale began increasing, giving buyers a wide array of options. This trend has continued into the summer, with new listings reaching a 10-month high in July. In total, 183,450 homes were available for sale across Canada last month, according to CREA.

The reasons for the listings pileup, suggests RBC’s Battaglia, are twofold. “The sting of high interest rates still seems to be forcing the hand of some sellers,” the economist explains.

This has been especially true in the Toronto and Vancouver condo markets, where experts suspect distressed investors are dumping units. In both urban areas, new listings for all housing types soared about 20% year-over-year in July, with condo units accounting for a large chunk.   

On top of that, some homeowners look to be getting ready for what they hope is a busier market in the coming months. “Rate cuts may also be enticing more sellers to list their homes in anticipation of renewed demand,” Battaglia adds.

3. Sellers are still stubborn on prices.   

Buyers may have more choice, but they aren’t necessarily negotiating big discounts — though that depends on the locale and property type, of course. The average price of a home in Canada was $667,317 in July, roughly unchanged from the previous month (-0.1%) and a year ago (-0.2).

With interest rates expected to continue to fall, sellers, it seems, are holding out for a demand-side rebound even if they have already decided to list their homes for sale. “Resilience of prices has remained a key theme in the market as sellers are unwilling to move lower given the latent demand on the sidelines,” writes Central 1 Chief Economist Bryan Yu in a report. 

4. More signs of recovery are budding.  

While buyers and sellers are broadly stuck in a holding pattern in Toronto and Vancouver, RBC’s Battaglia sees hints of a turnaround elsewhere in the provinces of Ontario and B.C. “Hamilton-Burlington, Ottawa, Guelph, and Kitchener-Waterloo have all recorded a second consecutive increase in monthly sales on a seasonally adjusted basis this July,” writes Battaglia. “It’s possibly a sign of renewed buyer appetite,” noting that in B.C., Victoria and the Okanagan area have seen back-to-back monthly gains in sales activity.

For now, Calgary — and the Prairies in general — continues to reign as Canada’s housing hot spot (albeit with the pace of home sales slackening).

Though down 0.1% between June and July, the benchmark price of a Calgary home ($588,600) remains up 8% from a year ago, compared to Toronto, where the benchmark of $1,097,300 is down 5%, and Vancouver, where the benchmark of $1,197,700, declined 0.8% annually.

5. This summer has set the stage for a “slam dunk” year for Canadian real estate in 2025.  

Despite the doldrums of summer, CREA suggests broader economic conditions are in place for a much hotter market in the New Year. Introducing CREA’s July data, the association’s top economist cites future rate cuts and pent-up demand as the fuel for the fire: “The forecast for a rekindling of Canadian housing activity going into 2025 has just gone from a layup to a slam dunk,” writes Shaun Cathcart, CREA’s senior economist.