5 Key Facts About Canadian Real Estate in August

From the strongest and weakest housing markets to a surge in newly listed homes, here’s what you need to know about Canadian real estate this month.

By Josh Sherman | 3 minute read

The Canadian Real Estate Association says home prices increased once again in July, albeit at a slower rate than what was seen during the preceding three months.

Around the midway point of each month, the Canadian Real Estate Association releases an overview of the national housing resale market. In these reports, CREA reveals how many existing homes sold during the previous month, what the average selling price reached, and more. Here are five big takeaways from the CREA’s August report:

1. Home sales activity is becoming more “sustainable” 

A total of 41,186 homes changed hands in July, up 8.7% from the same time last year. That’s “exactly aligned” with the average number of sales for the month of July that was observed between 2000 and 2019, notes a report from Scotiabank Economics. That’s also a more sustainable number of sales than we’ve seen in the recent past, the report says — but there’s a catch: “Merely being aligned with what was considered a more sustainable long-term average relative to recent years does not mean all is well with Canada’s housing market as affordability remains out of reach for many first-time home buyers and supply continues to lag.” 

2. Calgary is Canada’s hottest housing market 

““Calgary remains arguably the strongest market in Canada,” writes BMO Senior Economist Robert Kavcic in a report citing the Albertan city’s scorching sales-to-new listings ratio of 82%. Put simply, that ratio means about eight homes sell for every 10 that are listed. In a balanced market, which favours neither buyers nor sellers, the ratio is typically between 40 to 60%, according to CREA. A ratio below 40% is a buyer’s market, whereas a ratio above 80% is a seller’s market. “We’ve argued all along that this market was cheap heading into the pandemic boom, and remains cheap coming out of it,” writes Kavcic of Calgary.

Prices in so-called Cowtown have now overtaken the early-2022 peak. “In other words, while most of the rest of the country struggled through a correction, Calgary just powered ahead,” Kavcic adds. In a separate report, TD Economist Rishi Sondhi sheds some light on what might be behind Calgary’s strength, suggesting “robust interprovincial migration and decent affordability, among other factors” are juicing the market.  The benchmark price of a Calgary home was $551,300 last month.  

3. Canada’s softest major housing market is Toronto  

While relatively good affordability may be stoking demand in Calgary, where TD’s Sondhi notes sales have soared 9% since May, the opposite appears to be happening in Toronto. Over the same time period, sales activity in Toronto — where Sondhi notes “affordability has deteriorated sharply” — has declined by 16%. Interestingly, the majority of local housing markets saw sales increase on a month-over-month basis in July, yet a substantial decline in Toronto was enough to pull the national transaction total into negative territory (0.7%), relative to June.

BMO’s Kavcic points out another stark difference between high-flying Calgary and low-slung Toronto: “At the other end of the spectrum, Toronto now has the lowest sales-to-new listings ratio among the major markets at 44%, after a strong wave of properties came for sales in recent months.” In July, the benchmark price of a Greater Toronto Area home was $1,161,200.

4. Canadian home prices continue to push higher  

Between June and July, the index price of a Canadian home climbed 1.1%, according to CREA. This is “a larger-than-normal” monthly increase, according to the association, but gains in April, May, and June were roughly double that, percentage-wise. “This is in line with sales having levelled off as new listings have been recovering,” says CREA in a news release. Last month, the average price of a home in Canada was $668,754, a 6.3% increase from July 2022.

5. Finally, new listings are flooding the market  

Earlier this spring, new listings slumped to a 20-year low, but the trend of potential home sellers holding out is clearly a thing of the past. “Sellers are stepping out of the sidelines in every region of the country, significantly driving up new listings in the process in some markets,” note RBC’s Assistant Chief Economist Robert Hogue and his colleague Rachel Battaglia, an economist, in a response to the CREA data. The economists note the following month-over-month increases in new listings by local housing market:

• Calgary, Atla. (+7.5%)
• Edmonton, Atla. (+11.9%)
• Fraser Valley, BC (9.5%)
• Hamilton, Ont. (+15.2%)
• Kitchener-Waterloo, Ont. (+21.2%)
• London, Ont. (+19.9%)
• Ottawa, Ont. (+5.6%)
• Regina, Sask. (+6.9%)
• Saguenay, Que. (+28.2%)
• Toronto, Ont. (+7.8%)
• Victoria, BC (+9.5%)

“While striking, these increases are from exceptionally low levels at the start of this year. They merely reset the bar closer to normal in most instances,” the economists conclude.