Despite some relative peaks, Canadian housing activity remains in a holding pattern

Diving into August’s housing data

There were about 177,450 properties listed for sale on all Canadian MLS systems at the end of August, up 18.8% from a year earlier but still more than 10% below historical averages of around 200,000 listings for this time of year.

New listings posted a 1.1% month-over-month increase in August. For the second month in a row, the national increase was led by a much-needed boost in new supply in Calgary. New listings were also up in Edmonton, which worked to offset a decline in the Greater Toronto Area.

The national sales-to-new listings ratio moved up to 53% as sales rose only slightly more than new homes listings during the month. This was almost unchanged from 52.9% in July – the measure has barely moved from its current level since April. The long-term average for the national sales-to-new listings ratio is 55%, with a sales-to-new listings ratio between 45% and 65%, generally consistent with balanced housing market conditions.

“With more interest rate cuts now expected between now and next summer, the stage is set for a faster return of demand, but we’re clearly not there just yet,” said James Mabey, CREA’s chair.

“There are typically four times in any given year that see a burst of new supply that can excite the market and draw buyers off the sidelines, and those are the first weeks of April, May, June and September. So, the first week of September saw not only a third rate cut, but also a lot of new properties for buyers to consider.”

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The Canadian housing market is stuck

There were 4.1 months of inventory on a national basis at the end of August, down from only 4.2 months at the end of July.

This measure of market balance has been range-bound between 3.8 months and 4.2 months since last October, further evidence of the Canadian housing market being stuck in place. The long-term average is about five months of inventory.

The National Composite MLS Home Price Index (HPI) was unchanged from July to August, following two small increases in June and July. That being said, the bigger picture is that prices at the national level have been basically flat since the beginning of the year.

The actual (not seasonally adjusted) national average home price was $649,100 in August 2024, essentially unchanged – only +0.1% – from the same time last year.

The non-seasonally adjusted National Composite MLS HPI stood 3.9% below August 2023. According to CREA, this mostly reflects price gains last spring and summer that were followed by declines in the second half of last year. The organisation also thinks it's likely that year-over-year comparisons will improve from this point on.

CREA represents more than 160,000 realtors working through 69 real estate boards and associations.