Is the balance of power shifting to buyers?
Canada's major housing markets are experiencing an influx of inventory as new listings outpace sales growth, according to data from the Royal Bank of Canada (RBC).
This trend is particularly noticeable in the country's more expensive markets, with even the bustling Calgary market seeing inventory growth.
“We suspect many sellers are timing their move ahead of interest rate cuts with expectations of a rebound in demand,” RBC economist Rachel Battaglia said in the report. “A rise in new condo completions in the Toronto area and struggling homeowners (including investors) are likely compelling more property owners to sell too.”
This influx of supply has resulted in price softening. The MLS Home Price Index dipped in Vancouver and remained stagnant in Toronto. Montreal and Calgary are also seeing a deceleration in price growth.
“We think most buyers will wait for steeper rate cuts before jumping into the market as the lagged impact of high interest rates keeps budgets under pressure,” Battaglia said.
Montreal saw a 4% increase in transactions from May, halting three months of declining activity. However, a similar rise in new listings has kept the supply-demand dynamic relatively unchanged.
Active listings are now 24% above their level from a year ago, maintaining moderate competition among buyers and preventing significant price increases. The median price for single-family homes has decreased by 1.2% since May.
Read next: What's next for Toronto's housing market?
The Calgary housing market also remained competitive, with sales activity reaching a five-month high. Despite robust price growth, the MLS composite home price index is 8.5% higher than last year.
Vancouver experienced a 5% monthly increase in sales, but this wasn't enough to surpass last year's levels. New listings jumped by an estimated 9.5% from May, pushing the sales-to-new listings ratio to its lowest since January 2023. The composite MLS benchmark home price index is now just 0.5% above a year ago.
Row and apartment dwellings saw a 17% annual increase, while single and semi-detached homes recorded a 12% gain. “A turning point in the Bank of Canada’s monetary policy was enough to entice more buyers to market,” said Battaglia, adding that Calgary remains one of the more affordable major markets despite recent price increases.
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