Where Are Canada’s Buyer’s and Seller’s Markets Right Now?

Homebuyers in Calgary face stiff competition compared to those in other Canadian cities while the national housing market is “balanced”: economist.

By Josh Sherman | 3 minute read

Local sales-to-new listings ratios can provide clues as to which major Canadian housing markets are favouring buyers and where sellers may have an edge.

Is it a buyer’s market or a seller’s market? It depends where you’re looking.

Recently, a leading Canadian economist analyzed sales-to-new listings ratios in major Canadian cities to give an idea of whether

we’re in buyer’s territory or seller’s territory. As with almost anything real estate-related, the answer comes down to location.

First, a note on what a sales-to-new listings ratio is. It’s a popular measure of supply and demand. It expresses as a percentage the ratio of home sales to new listings over a given period. Sales-to-new listings ratios roughly between 40 to 60% are said to reflect balanced conditions, where neither buyers nor sellers have a distinct competitive edge in the market. This range suggests that, for every 10 homes that are listed, four to six sell. Anything above the 60% mark is typically considered a seller’s market, with homes selling at a rate almost as fast as they are listed, while anything below is perceived as a buyer’s market.

On a national level, in January, the Canada-wide sales-to-new listings ratio climbed to 58.8%, up from 57.6% in January and 50.2% in December 2023, according to the Canadian Real Estate Association (CREA). That matches the 10- and 20-year medians for the measure, notes Robert Kavcic, senior economist and director of economics for BMO, in a report. “In other words, we’re almost seeing a perfectly balanced resale market again when looking at the aggregate Canadian numbers,” he writes. “Regionally, there is variation of course, with the Prairies (especially Calgary) boasting sellers’ markets, while a scattering of smaller Southern Ontario cities remain relatively soft (although tightening from last fall).”

Canada’s Big Buyer’s and Seller’s Markets so Far This Year

As BMO’s Kavcic notes, the Calgary housing market is firmly planted in seller’s territory, with a sales-to-new listings ratio of 88.1%, according to CREA. A healthy job market, which, together with more affordable home prices, has made Calgary a magnet for migrants from other provinces — and that trend is expected to sustain demand throughout 2024. Edmonton is in the same boat, in terms of market dynamics, with a sales-to-new listings ratio of 74.4%.

It’s a different story in Canada’s three most populous cities. “The big cities look relatively balanced again, with Vancouver, Toronto and Montreal carrying neutral sales-to-new listings ratios,” Kavcic continues in the report. As per CREA data, Greater Vancouver’s sales-to-new listings ratio was 51.5%, while Greater Toronto’s was 53.6% and Montreal’s was 60.2%. “Cottage country in Ontario and B.C. also remains very soggy (though this is far from peak season).”

There are still question marks about what this means for the spring real estate market. “Again, with spring also comes more listings, so we’ll need to see how much pent-up demand is waiting to swallow up (or not) the flow that will be coming in the next few months,” Kavcic states. “But the starting point for the market is at least well balanced.” A lot is also riding on where interest rates are headed. Some economists suggest a cut to the Bank of Canada’s overnight rate, which influences mortgage rates, could spark a homebuying frenzy  — which would certainly be good news for sellers across the country.

When the sales-to-new listings ratio suggests a market is in buyer’s or seller’s territory, it doesn’t mean that every buyer gets a deal, or faces challenges. Even within a buyer’s market, for example, there could be specific pockets where bidding wars break out. Check out Wahi’s tips for how to navigate bidding wars in these situations.