Sales fell nearly 10 per cent year-over-year, active listings climbed to the highest October level ever recorded, and prices declined across every major property type and region. These are not the markers of a market finding equilibrium. They are the conditions of a market struggling to clear.

For much of 2025, falling prices seemed to lead to increased sales activity. As prices fell, more buyers could afford houses, so more purchased houses. But October has violently broken this trend, significantly slower than last year, with supply growing and demand falling. Should this trend continue, we’ll move deeper into buyer’s market territory and see further downside pressure on prices. Buyers have taken a step back to safety against renewed trade tensions, rising unemployment and increasing mortgage delinquencies. 

In spite of this, TRREB’s report headline (“More Choice, Greater Affordability for Buyers”) message focuses on improved affordability through lower mortgage rates and reduced selling prices. That framing obscures the magnitude of the shift underway. When home sales drop and inventory accelerates simultaneously, the issue is not simply buyer opportunity. It is the erosion of purchasing conviction and a widening disconnect between what sellers believe their homes are worth and what buyers are willing to pay. A decade of ultra-liquid conditions has given way to an environment where liquidity itself is failing.

The numbers reveal a market losing its floor

The GTA recorded 6,138 sales in October, the third-weakest October since at least 2010. The only weaker years were 2022 and 2023, both widely recognized as recessionary periods for real estate activity. Meanwhile, active listings surpassed 27,800, a 17 per cent annual increase and the largest October inventory level ever published by TRREB, as shown in the chart below. New listings have not collapsed. Demand has.

Prices are following. The average selling price declined more than seven per cent year-over-year, and the MLS HPI composite fell five per cent. Detached homes in the 416 dropped more than nine per cent. Condominiums, long considered the last rung of entry-level ownership, posted double-digit declines in sales and continued price softness. Even the segments once assumed to be supply-constrained are no longer insulated.

A market can absorb falling prices when turnover is strong and new buyers enter confidently. That is not the present situation. Homes are taking longer to sell. Relist cycles are increasing. Public sentiment surveys show heightened anxiety about employment security and renewal risk. The conditions that normally signal the bottom of a cycle, such as rapid absorption, visible investor re-entry and the return of bidding in pockets of the market, are absent.

Why TRREB’s framing misses the point

TRREB highlights lower mortgage payments as a positive development. The logic is correct but incomplete. Monthly payments are falling because both borrowing costs and asset values are falling together. That is not evidence of restored affordability but rather a symptom of waning demand meeting rising inventory. A household is not empowered by a lower payment if it does not trust its future income, nor by a reduced asking price if it expects that price to fall further.

The suggestion that the present environment favours buyers is accurate only in the narrow sense that buyers now hold greater negotiating leverage. For sellers, the implication is harsher. Each month of elevated inventory exerts incremental downward pressure on pricing expectations, particularly for those facing refinancing deadlines, investor exit timelines or job insecurity. Price discovery has not yet run its course, and the depth of unsold stock ensures it will continue.

The report also implies that a more predictable macroeconomic backdrop, including clarity on trade relations with the United States and China, could unlock pent-up demand. This underestimates the extent to which confidence has already fractured. The challenge is not merely uncertainty about external conditions. It is a shift in perception about the direction of housing as an asset class, following years in which price appreciation was treated as a near-guaranteed outcome.

The implications of excess supply

The gulf between active listings and transactions is now the widest in the data history (see the chart below). That spread matters because housing markets do not correct on price alone. They correct on time. As listing windows stretch and carrying costs accumulate, forced selling accelerates. The early signs are visible in investor-held properties where mortgages originated in 2020 to 2021 are approaching renewal at rates two to three times higher than their initial term. If wage growth and rent increases fail to offset those adjustments, more supply will enter the market under pressure rather than preference.

For policymakers, the situation complicates the usual prescription to build more housing. Supply expansion remains essential for long-term affordability, yet the near-term problem is not insufficient construction so much as insufficient absorption. Programs aimed at accelerating new starts risk backfiring if they collide with a demand downturn and a credit environment that remains restrictive. The next phase of housing policy must not only stimulate supply but stabilize the conditions under which that supply can be financed, purchased, and retained. Recent proposals to reduce upfront costs for first-time buyers in Ontario offer one such example.

For buyers, the opportunity is real but requires discipline. Lower prices and reduced competition do not automatically translate into strategic entry points. Markets in correction rarely move in straight lines. The prudent buyer evaluates not just headline prices but the trajectory of inventory, the stability of employment and the likelihood that financing conditions will shift again before maturity. The discount available today may expand tomorrow.

For sellers, realism is not optional. List-to-sale ratios are already reverting toward levels seen in the early 1990s, and the pool of buyers who can purchase without financing friction is narrowing. Pricing to the market, not to the memory of 2021 valuations, is now the difference between selling and relisting.

What comes next

The next decisive turn in the GTA housing market will not be triggered by a single rate cut or a cosmetic rebound in monthly sales. It will come when inventory begins to clear at a sustained pace and when buyers regain conviction in the trajectory of their own balance sheets. Neither condition is currently in place.

The October report will be read by some as evidence of a turning point in affordability. It reads instead as confirmation that the correction has more room to run. Markets do not bottom on hope. They bottom on exhaustion. The data shows a market still searching for that threshold.

Daniel Foch

Daniel Foch is the Chief Real Estate Officer at Valery.ca, and Host of Canada’s #1 real estate podcast. As co-founder of The Habistat, the onboard data science platform for TRREB & Proptx, he helped the real estate industry to become more transparent, using real-time housing market data to inform decision making for key stakeholders. With over 15 years of experience in the real estate industry, Daniel has advised a broad spectrum of real estate market participants, from 3 levels of government to some of Canada’s largest developers.

Daniel is a trusted voice in the Canadian real estate market, regularly contributing to media outlets such as The Wall Street Journal, CBC, Bloomberg, and The Globe and Mail. His expertise and balanced insights have earned him a dedicated audience of over 100,000 real estate investors across multiple social media platforms, where he shares primary research and market analysis.

The post Foch: A market in full correction appeared first on REM.

The month also broke with seasonal tradition. Sales declined by 1.7 per cent from August to September, a reversal that is unusual for a period when activity typically accelerates. Major markets, including Vancouver, Calgary, Edmonton, Ottawa and Montreal, all saw slower sales, with Toronto and Winnipeg as the exceptions. Rather than marking the beginning of renewed momentum, the September figures suggest a market struggling to generate even the modest lift that normally accompanies the fall season.

Supply, demand and the tilt toward buyers

What ultimately governs market direction is the relationship between supply and demand. While sales volumes were up 5.2 per cent from last year, listings increased at a faster clip. Active listings stood at nearly 200,000 properties in September, a 7.5 per cent rise year-over-year and roughly consistent with long-term averages. In contrast, sales remain well below those averages.

This divergence matters. A housing market bends toward whichever side expands more quickly. At present, listings are outpacing sales, forcing sellers to adjust downward to meet buyer bids. 

CREA’s sales-to-new listings ratio fell to 50.7 per cent, below the long-run mean of 54.9 per cent. Months of inventory sat at 4.4, slightly under the historical benchmark of five. According to traditional definitions, these readings still describe a balanced market. Yet these conventions are increasingly outdated in an era when technology accelerates transactions and shortens days on market. By older standards, the market appears stable. By contemporary dynamics, it leans distinctly toward buyers.

Prices flat, confidence fragile

On the surface, prices appear steady. The MLS Home Price Index was effectively unchanged in September, slipping just one-tenth of a percentage point from August. Year-over-year, the decline was 3.4 per cent. Such stability suggests the violent correction of 2022 and 2023 has given way to a slower grind. But stability in the numbers does not equal stability in sentiment.

The Canadian labour market has begun to fray. The closure of Stellantis operations in Brampton erased 3,000 jobs. Manufacturing layoffs ripple through Ontario. Unemployment rates are rising across most cities, with Alberta as a notable exception. GDP growth and job creation have been flattered by public sector hiring and fiscal spending, but households know that secure employment is what enables the confidence to purchase a home. Without conviction about income, families hesitate to assume long-term debt even if mortgage rates edge lower.

The fragility of confidence is why CREA’s invocation of “three years of pent-up demand” rings hollow. Demand is only meaningful if it is actionable. The desire to own does not translate into transactions when affordability remains out of reach. Wages must rise, rates must fall further, or prices must adjust downward before demand can be considered real.

The policy backdrop and political void

For years, population growth was the bedrock of housing demand. Immigration targets sustained a bullish narrative even when affordability eroded. That tailwind has now slackened. Political appetite for renewed acceleration in population growth is weak. Without it, a key pillar of long-term demand has been diminished. The looming renegotiation of CUSMA in 2026 adds further uncertainty to the outlook for demand, as the prospect of trade disruption clouds Canada’s broader economic trajectory.

Meanwhile, fiscal and monetary policy operate at cross purposes. Bond markets price the possibility of higher fixed rates toward the end of next year even as the Bank of Canada signals restraint. Government spending props up GDP in the short term, yet this masks structural vulnerabilities. Insolvencies and delinquencies are rising. The foundations of household balance sheets are deteriorating.

It is in this context that CREA’s optimism must be read. The association and its economists are correct that interest rates have normalized relative to the recent past. They are less convincing in suggesting that this will unleash latent demand. Recovery requires not only lower financing costs but also a sense that the broader economy is resilient enough to sustain households over the long term.

An extended holding pattern

Canada’s housing market now occupies an awkward middle ground. It is neither collapsing nor recovering. The correction phase has ended, but the renewal phase has yet to begin. Prices are flat, sales volumes are weak, and the balance of supply and demand tips gradually toward buyers. The system is stalled in place, waiting for either confidence or affordability to break the deadlock.

For policymakers, this limbo should be a warning. In the absence of robust wage growth, sustained employment, or structural improvements to housing supply, the market will not find a natural path back to equilibrium. For households, the message is equally stark. Stability is not the same as security. The risks of job loss, inflation and policy drift weigh heavily on decisions to buy or sell.

The September report is thus not the turning point CREA suggests. It is another entry in a long sequence of data that shows the same reality. Canada’s housing market is stuck. The question is not whether a boom or bust is imminent. It is whether we are prepared for the prolonged stasis that lies ahead.

Daniel Foch

Daniel Foch is the Chief Real Estate Officer at Valery.ca, and Host of Canada’s #1 real estate podcast. As co-founder of The Habistat, the onboard data science platform for TRREB & Proptx, he helped the real estate industry to become more transparent, using real-time housing market data to inform decision making for key stakeholders. With over 15 years of experience in the real estate industry, Daniel has advised a broad spectrum of real estate market participants, from 3 levels of government to some of Canada’s largest developers.

Daniel is a trusted voice in the Canadian real estate market, regularly contributing to media outlets such as The Wall Street Journal, CBC, Bloomberg, and The Globe and Mail. His expertise and balanced insights have earned him a dedicated audience of over 100,000 real estate investors across multiple social media platforms, where he shares primary research and market analysis.

The post Foch: Canada’s housing market is stuck in neutral appeared first on REM.

Don’t miss out—join us online for REM’s monthly market breakdown on Oct. 28 at 2 PM ET. REM, columnist Daniel Foch will analyze CREA’s latest stats, regional variations and what shifting sentiment means for Realtors—register here.

September’s housing data for the Greater Toronto Area released by the Toronto Regional Real Estate Board (TRREB) carried headlines that seemed to suggest improvement.

Sales were up 8.5 per cent compared with a year earlier, and the Bank of Canada’s September rate cut provided a modest lift to affordability. More households stepped back into the market as mortgage payments inched closer to reach, creating the impression that momentum is returning. Yet the deeper reading is less reassuring. Prices remain in retreat, listings continue to accumulate, and the time it takes to sell a property has stretched noticeably. The result is a market that looks busier but remains structurally imbalanced, as I pointed out in my op-ed for August’s numbers.

TRREB reported an average sale price of $1.06 million in September, down 4.7 per cent year-over-year. The MLS Home Price Index fell by 5.5 per cent, confirming that valuations are slipping. Month-to-month, prices appear stable, but the broader trend is downward pressure as supply outpaces the ability of buyers to absorb it.

Supply outpaces demand

The year-over-year summary reveals how fragile this apparent recovery is. Active listings climbed by nearly 19 per cent compared with September 2024, while sales increased by less than half that pace. New listings edged up only 3.9 per cent, meaning more homes are stagnating on the market and have driven the total inventory to 29,394. As Valery agent Robert Marsiglio illustrated in a chart shared on X (given below), September 2025 ranked as the second busiest September for new listings across the GTA in the past decade. Homes are also taking longer to sell, with the average listing period increasing from 27 to 33 days and property days on market stretching from 42 to 51.

Earlier today, I tweeted that no serious discussion of a bottom can take place while supply continues to rise faster than demand. Until that imbalance shifts, prices are unlikely to stabilize with any permanence.

Uneven geographies

The breakdown by home type illustrates just how uneven the correction has become. Detached sales rose 9.6 per cent year-over-year, yet average prices fell 5.1 per cent. Semi-detached homes saw an 11 per cent increase in sales, with prices down 6.8 per cent. Condominiums recorded a 7.2 per cent gain in sales while prices slipped 4.3 per cent.

One segment stands apart. Townhouse sales in the 416 soared nearly 40 per cent compared with last year, the strongest growth of any category. Prices still declined by almost five per cent, but the sharp rise in transactions signals a clear buyer preference for ground-oriented homes that remain relatively more affordable than detached properties while offering more space and utility than a condominium.

The divergence between the 416 and 905 regions further underscores the imbalance. Detached home prices in the city declined by less than one per cent, while suburban detached properties fell by 7.2 per cent. Central locations show relative resilience, while suburban markets face a steeper adjustment. The leap in townhouse demand within Toronto proper points to an enduring appetite for “missing middle” housing, even as other segments struggle to find stability.

Policy, economics and the fragility of confidence

All of this is unfolding against a difficult economic backdrop. GDP contracted by 1.6 per cent in the second quarter, and unemployment in Toronto has climbed to nine per cent. Inflation has cooled to 1.7 per cent, which gives the Bank of Canada space to continue easing, but households remain wary. Even with slightly lower borrowing costs, buyers are pressing harder in negotiations, fully aware that inventory levels tilt the leverage in their favour.

TRREB is right that lower rates stimulate spending and provide some cushioning for the broader economy. Yet reliance on monetary easing to prop up sales activity is a poor substitute for structural balance. A housing market that functions only when rates are falling reflects deeper problems of affordability and income stagnation.

What comes next

The path forward will hinge on whether demand can sustainably absorb the surge of listings. Additional rate cuts may add momentum, but they cannot alone correct the oversupply or rebuild seller confidence. Policymakers and builders will need to confront the alignment of new supply with true affordability rather than perpetuating cycles of overhang and retrenchment.

For buyers, this remains a rare period of leverage. Choice is abundant, timelines are extended, and sellers are adjusting expectations downward. September’s data reinforce a clear point. Toronto’s housing market has not yet found its bottom, and until supply and demand converge, recovery will remain more appearance than reality.

Daniel Foch

Daniel Foch is the Chief Real Estate Officer at Valery.ca, and Host of Canada’s #1 real estate podcast. As co-founder of The Habistat, the onboard data science platform for TRREB & Proptx, he helped the real estate industry to become more transparent, using real-time housing market data to inform decision making for key stakeholders. With over 15 years of experience in the real estate industry, Daniel has advised a broad spectrum of real estate market participants, from 3 levels of government to some of Canada’s largest developers.

Daniel is a trusted voice in the Canadian real estate market, regularly contributing to media outlets such as The Wall Street Journal, CBC, Bloomberg, and The Globe and Mail. His expertise and balanced insights have earned him a dedicated audience of over 100,000 real estate investors across multiple social media platforms, where he shares primary research and market analysis.

The post Foch: Why Toronto housing has yet to reach the bottom appeared first on REM.

August marked the fifth consecutive month of sales gains, edging national transactions 1.1 per cent higher on a seasonally adjusted basis and bringing cumulative activity since March to 12.5 per cent. It was the strongest August since 2021. Yet such framing obscures a more sobering reality.

Even after half a year of steady increases, sales remain well below long-term averages, as the Canadian Real Estate Association’s own chart illustrates below. The so-called resurgence is not a restoration of vitality by any means. It is just the slow crawl back to ordinary levels of activity after a period of deep contraction.

Supply’s ascendancy

If there is a true story in CREA’s August release, it is the rise of supply. New listings climbed 2.6 per cent month-over-month, more than double the pace of sales (refer to the chart by Valery below). Active listings stood 8.8 per cent higher than a year earlier, placing inventory squarely in line with historical norms. The sales-to-new listings ratio slipped to 51.2 per cent, beneath its long-term average of 54.9 per cent and a full point lower than in July. The balance has moved further in favour of supply.

These dynamics do not make for trivial ones. Policymakers and market participants alike must recognise that rising inventories alter the psychology of buyers and sellers. With more choice in the marketplace, prospective purchasers feel less urgency to transact, while vendors face greater competition. This is the mechanism by which price discovery bends downward, not upward, even in the face of incremental sales growth.

Prices under pressure

The price data reinforce this narrative of fragility. The national Home Price Index (HPI) was virtually unchanged in August, slipping 0.1 per cent from July and standing 3.4 per cent below its level a year earlier. The national average sale price rose 1.8 per cent year-over-year, but this was more a reflection of compositional shifts in where sales occurred than a substantive change in valuations. Benchmark prices remain largely flat since spring, a plateau that conceals persistent downward pressure in many local markets where supply is rising more rapidly than demand.

Months of inventory at 4.4 still sit slightly below the long-term average of five, a level that, in isolation, suggests modest seller leverage. Yet the trajectory tells a different story. New listings are climbing steadily, and with the seasonal surge of autumn supply we have witnessed, the leverage is already drifting toward buyers.

The policy lens

Much of the market’s trajectory in the coming months hinges on monetary policy. CREA’s economists openly speculated that a September rate cut could entice buyers off the sidelines. Yet such relief, if it arrives, will not erase the structural imbalance created by a surge in supply. Monetary easing may lubricate demand, but it cannot extinguish the additional competition sellers now face.

For governments, the lesson is sharper still. The surge of listings points toward the idea of strain. Investors under pressure from higher carrying costs, owners confronting mortgage renewal shocks, and developers actively working to clear unsold product all contribute to the current flow of listings onto the market. Urbanation recently reported that completed, developer-held condo inventory in the Greater Toronto Area reached a record high in Q2 2025. At the same time, STOREYS quoted major developers pointing to competitive pricing and incentive programs as necessary adaptations in the present market.

Policymakers should be wary of mistaking higher transaction counts for genuine affordability progress. A market that clears at lower prices due to stress-driven listings is a symptom of fragility, not a cure.

Outlook

The temptation to label August a turning point is strong. After years of volatility, Canadians are eager for signs of stability. Yet the evidence counsels caution. Sales are inching upward but remain subdued by historical standards. Listings are climbing more quickly than demand, shifting the balance of power toward buyers. Prices, meanwhile, are not rebounding; they are treading water under the weight of excess supply.

To call this a comeback is to misunderstand the mechanics of housing markets. Canada’s real estate sector is in a phase of recalibration, not resurgence, as some of my previous pieces allude to. Stakeholders who mistake volume for vitality risk misreading the very forces that will define the months ahead.

Daniel Foch

Daniel Foch is the Chief Real Estate Officer at Valery.ca, and Host of Canada’s #1 real estate podcast. As co-founder of The Habistat, the onboard data science platform for TRREB & Proptx, he helped the real estate industry to become more transparent, using real-time housing market data to inform decision making for key stakeholders. With over 15 years of experience in the real estate industry, Daniel has advised a broad spectrum of real estate market participants, from 3 levels of government to some of Canada’s largest developers.

Daniel is a trusted voice in the Canadian real estate market, regularly contributing to media outlets such as The Wall Street Journal, CBC, Bloomberg, and The Globe and Mail. His expertise and balanced insights have earned him a dedicated audience of over 100,000 real estate investors across multiple social media platforms, where he shares primary research and market analysis.

The post Foch: Look closer before calling the August market a comeback appeared first on REM.

Sales clocked in at 5,211, slightly higher than last year, but on a seasonally adjusted basis, it was the first monthly decline since March. Prices remain under pressure: the benchmark fell to $978,100, continuing a nine-month streak without gains. More importantly, the mix of which products are falling hardest is surprising even to seasoned observers.

Detached homes and condos lead the decline

Conventional wisdom said 416 detached homes would prove more resilient than condos. Instead, they have posted one of the steepest drops of this cycle, down more than 10 per cent year over year, the largest decline in the core and among freehold properties. The only segment that fared worse was 905 condominiums, which fell 10.6 per cent annually. These are not marginal adjustments; they are some of the deepest corrections seen in recent memory.

Other product types were not spared either. Average prices are down across nearly every category, with one exception: 416 townhouses, up about one per cent. For investors and builders, that small uptick hints at a potential redevelopment angle. Townhouse-style multiplexes on detached lots could pencil in more favorably if the spread between detached and townhouse values persists. But that is more of a niche silver lining than a broad market trend.

Inventory surge reshapes market power

The biggest story is not just about falling prices, but also about swelling supply. Active listings surged 22.4 per cent compared to last August, one of the largest year-over-year increases on record. Only May 2025’s 41.5 per cent spike rivaled it.

And the momentum is not slowing. Active listings historically rise in September, and early tracking suggests another record could be set. Last year, inventory jumped five per cent from August to September. With 2025 already running 20 to 40 per cent higher year over year, a comparable gain would push Toronto into uncharted territory for supply:

This imbalance is shifting the balance of power. With more options, buyers can demand price cuts. Sellers who resist price discovery face longer wait times. The average days on market rose from 29 to 33, with properties now typically taking more than a month, sometimes two, to sell.

Sales are up for the wrong reasons

TRREB and bullish analysts may point out that sales are higher than last year. But the data reveal why: more people are transacting because prices are falling, not because confidence or fundamentals have improved. In July, sales briefly outpaced new listings, hinting at demand catching up. But in August, that reversed. New listings jumped 9.4 per cent while sales crept up only 2.3 per cent. Supply growth is once again outpacing demand growth, a hallmark of deepening buyer’s market conditions.

The broader policy dilemma

The Bank of Canada faces pressure to restart rate cuts this fall. Monetary easing might pull sidelined buyers back in, but without structural affordability through higher wages and more attainable supply, it risks reigniting speculative churn. Lower rates cannot solve a market defined by abundance without affordability.

Meanwhile, TRREB has called for infrastructure spending to support growth. That is the more durable fix: aligning housing with incomes, transit, and services. Otherwise, the market risks bouncing between boom and bust on the back of credit cycles.

What this means for buyers and builders

For buyers, today’s environment is one of rare leverage. Longer days on market and swelling inventory mean bidding wars are evaporating, replaced by opportunities to negotiate. The risk is not missing out, but over-reaching, especially if prices continue to slide into the fall.

For builders, the era of assuming perpetual scarcity is over. Projects premised on constrained supply may underperform. The developers best positioned will be those who deliver family-sized units, rentals, and mixed-income communities, products resilient to speculative cycles.

A market that mirrors the economy

The GTA housing market has always been a proxy for the broader economy. Today’s weakness coincides with slowing exports in Ontario’s steel and automotive industries, pressured by U.S. tariffs. Housing, once the locomotive of economic recovery, cannot be counted on alone this time.

Whether the market stabilizes or continues correcting will hinge less on interest rates and more on structural alignment: matching supply to incomes, inventory to demand, and housing policy to the realities of the twenty-first-century economy.

Daniel Foch

Daniel Foch is the Chief Real Estate Officer at Valery.ca, and Host of Canada’s #1 real estate podcast. As co-founder of The Habistat, the onboard data science platform for TRREB & Proptx, he helped the real estate industry to become more transparent, using real-time housing market data to inform decision making for key stakeholders. With over 15 years of experience in the real estate industry, Daniel has advised a broad spectrum of real estate market participants, from 3 levels of government to some of Canada’s largest developers.

Daniel is a trusted voice in the Canadian real estate market, regularly contributing to media outlets such as The Wall Street Journal, CBC, Bloomberg, and The Globe and Mail. His expertise and balanced insights have earned him a dedicated audience of over 100,000 real estate investors across multiple social media platforms, where he shares primary research and market analysis.

The post GTA rich with listings, but houses still aren’t affordable: Foch appeared first on REM.

Don’t miss out—join us online for REM’s monthly market breakdown on Aug. 26 at 2 PM ET. REM, columnist Daniel Foch will analyze CREA’s latest stats, regional variations and what shifting sentiment means for Realtors—register here.

A shift is taking hold in Canada’s housing market, subtle enough to be missed in the noise yet powerful in its implications. Signals from July suggest a recalibration in the balance between buyer resolve and seller ambition.

National home sales climbed 3.8 per cent from June, marking the fourth straight monthly increase. Since March, transactions have risen 11.2 per cent, with the Greater Toronto Area leading the charge at 35.5 per cent growth over that period.

To the casual observer, it may look like the long-awaited recovery is here. In reality, this is a different kind of movement. The driver is not exuberance or a sudden easing of borrowing costs. The current lift in transactions is rooted in price adjustments, and that distinction matters more than it may seem.

This is especially apparent in CREA’s observation that an increase in transactions in the Greater Toronto Area played a large role in national sales volume moving up. We know that prices are falling most sharply in the GTA, so it would be fair to assume that there is a strong correlation between reduced prices, which lead to more affordability, creating more opportunity for buyers to enter the market. 

Will the same trend be required for the remainder of Canada to see sales growth? 

The narrowing of the gap

BMO Capital Markets has been clear about what is holding the market back: the spread between what sellers want and what buyers are willing to pay. Robert Kavcic, senior economist, describes it as a “wide bid-ask spread” that has prevented the market from clearing, leaving listings to languish. The only durable remedy is to close that gap.

There are three theoretical ways to achieve it. The first is forced selling, which would require a deep recession, rising defaults, and job losses, a scenario neither imminent nor desirable. The second is a substantial drop in mortgage rates into the low three-percent range, requiring a cut of roughly 100 basis points from current levels. That path is considered improbable in the near term.

The third is price reductions. BMO regards this as the most realistic outcome. RBC reaches a similar conclusion, noting that moderating prices in several regions have delivered the greatest affordability improvement in three years, encouraging more buyers to act.

The evidence bears this out. July’s MLS® Home Price Index was unchanged from June but 3.4 per cent lower than a year earlier. In the GTA, values have fallen 5.5 per cent in 12 months; Vancouver is down 2.8 per cent, and Calgary, long an exception to the rule, now sits 1.8 per cent lower. The modest easing in prices has been enough to coax more buyers back into the market.

Price movements as the true lever of affordability

In the current interest rate environment, the arithmetic of affordability favours price declines over marginal rate cuts. Consider a $700,000 home with 20 per cent down, a 25-year amortization, and a five per cent mortgage rate. A five per cent drop in price reduces monthly payments by approximately $165. By comparison, a 25-basis-point rate cut on the same home saves about $58 per month.

The implication is straightforward: in the near term, further moderation in prices will have a greater influence on unlocking demand than incremental moves by the Bank of Canada.

Price growth patterns have varied sharply across Canadian cities. Toronto, Vancouver, and now Calgary have all recorded year-over-year price declines. Toronto’s price performance over the past five years is the weakest among major Canadian markets, up just over 15 per cent, while New Brunswick leads with an 80.9 per cent gain since July 2020. Over the past three years, Toronto has also experienced the sharpest price drop among major markets, whereas Quebec City has posted the strongest gains.

Canada’s split-screen inventory picture

July’s new listings were essentially unchanged from June, but active inventory stood 10.1 per cent higher than a year earlier. Nationally, there were 4.4 months of inventory, a figure consistent with balanced conditions. Yet regional differences are striking.

RBC Economics in the same report referenced above, notes that Ontario and British Columbia are carrying the highest inventory in a decade, a situation that has fostered intense competition among sellers and is expected to keep prices under pressure well into 2026. In the Prairies, Quebec, and Atlantic Canada, inventory remains tight, in some cases below pre-pandemic norms. These disparities explain why price corrections are unlocking demand in certain provinces while others remain buoyant.

September’s test and the path to a durable recovery

September’s influx of new listings will test the market’s resolve. CREA highlights this as a pivotal moment, when the balance between buyer demand and seller supply could either sustain recent gains or compel further price concessions.

The outcome matters because the recent lift in sales reflects opportunity rather than exuberance. With mortgage rates still high, price adjustments have been, and will remain, the most powerful lever for unlocking demand. In many major markets, values have eased just enough to restore a measure of affordability, drawing sidelined buyers back into the fold. For the Bank of Canada, the clearest path to a sustained recovery that does not reignite inflation lies in allowing this process of price normalization to run its course, rather than relying solely on marginal rate cuts.

Daniel Foch

Daniel Foch is the Chief Real Estate Officer at Valery.ca, and Host of Canada’s #1 real estate podcast. As co-founder of The Habistat, the onboard data science platform for TRREB & Proptx, he helped the real estate industry to become more transparent, using real-time housing market data to inform decision making for key stakeholders. With over 15 years of experience in the real estate industry, Daniel has advised a broad spectrum of real estate market participants, from 3 levels of government to some of Canada’s largest developers.

Daniel is a trusted voice in the Canadian real estate market, regularly contributing to media outlets such as The Wall Street Journal, CBC, Bloomberg, and The Globe and Mail. His expertise and balanced insights have earned him a dedicated audience of over 100,000 real estate investors across multiple social media platforms, where he shares primary research and market analysis.

The post Foch: Canadian home sales are rising because prices are falling appeared first on REM.

Don’t miss out—join us online for REM’s monthly market breakdown on Aug. 26 at 2 PM ET. REM, columnist Daniel Foch will analyze CREA’s latest stats, regional variations and what shifting sentiment means for Realtors—register here.

The headlines are loud again. Home sales are up double digits. Buyers are back. Market is heating up. But if you’re reading that and assuming we’ve returned to boom times in the Greater Toronto Area housing market, take a step back and squint a little. The numbers tell a different story. And in this business, it’s the fine print, not the front page, that tells you where things are headed.

Yes, sales are up. But from where?

A low tide makes for easy gains

The Toronto Regional Real Estate Board (TRREB) July 2025 report touts a 10.9 per cent year-over-year increase in sales. That’s true. But let’s not pretend this is a return to 2021. We’re comparing this year’s performance to a brutally slow July in 2024. Gains from a low base can feel impressive on paper but are thin when stretched across the market’s broader context.

Prices are still down. Inventory is piling up. And homes are taking longer to sell. Those aren’t hallmarks of a market in full swing, but signals of a fragile rebound struggling to find its footing.

Prices down, affordability up… for now

The average home price in the GTA sits at $1,051,719, down 5.5 per cent from last July. Detached homes are down 5.1 per cent, condos down a staggering 9.3 per cent. These certainly aren’t rounding errors. They’re meaningful corrections.

But here’s where it gets interesting: as prices fall, affordability improves, at least on the surface. And this shift has attracted interest from buyers who may have been sidelined during the market’s peak. That’s part of why sales are ticking upward. People aren’t chasing the market. They’re entering it because it finally came back to them.

However, affordability is a slippery word in this environment. Rates haven’t meaningfully dropped. Mortgage qualification is still tight. And for every buyer who enters, there’s another household staying on the sidelines, unsure if this is truly the bottom.

Supply outpacing demand

The stat I’m watching closely? Active listings are up 26.2 per cent year-over-year. That’s massive. There are now over 30,000 homes on the market across the GTA, more than we’ve seen in several years.

Meanwhile, new listings rose by only 5.7 per cent year-over-year (lesser than June’s uptick). So where’s the jump in active inventory coming from? It’s not new supply. It’s old supply that’s sitting longer. And that points to a demand-side problem.

Homes aren’t moving like they used to (recall 2021). The average time a home sits on market (LDOM) has jumped by 25 per cent year-over-year. Properties are lingering. The majority of buyers are still hesitant.

Condo carnage and suburban softness

If you’re holding a pre-construction condo right now, you don’t need a market report to tell you what’s happening. You’re feeling it in your inbox: assignment listings, price drops, incentives. The condo market is taking the brunt of the correction.

Condos in the 905 area saw prices drop over 10 per cent. Even in the core, where demand tends to be more resilient, prices slipped nearly 9 per cent. That’s a sharp fall for a segment that once promised endless investor upside.

Townhouses and semis, long regarded as middle-market staples, saw year-over-year price drops of 7.4 per cent and 2.3 per cent, respectively. Detached homes, down 5.4 per cent, landed squarely between the two.

What we’re seeing is a broad-based softness, not a sector-specific slump. Every major home type is feeling the chill.

A market without momentum

The problem isn’t that buyers don’t want to buy. It’s that the market lacks conviction. There’s no urgency. When rates were low and prices were climbing, hesitation was costly. Today, waiting is rewarded.

That shift in psychology is powerful. It rewires the market’s metabolism. Buyers negotiate harder. Sellers reduce expectations. And the entire transaction cycle drags out.

In markets like these, volume can rise, just as it did in July, but that volume is often more reactive than proactive. It’s opportunistic. Buyers are bottom fishing.

So, is this the bottom?

Maybe. But bottoms in real estate are rarely sharp, and they almost never announce themselves. More often, they flatten out like a tired breath. What July gave us was a market trying to stabilize, not one bursting back to life.

The real momentum will come when two things align:

1. Interest rates ease meaningfully, unlocking credit and restoring confidence.
2. Sellers recalibrate expectations to match what buyers can actually afford.

Until then, we’ll keep seeing this kind of sideways movement. A little more volume. A little less price. A few more listings. A few more delays.

It’s not a crash. It’s not a boom. It’s a slow digestion.

Policy smoke and mirrors

TRREB’s commentary on the foreign buyer ban is worth noting. While many Canadians believe foreign investment is locked out, that’s not entirely true. Exemptions exist for multi-unit properties, development land, and rural housing.

But let’s be clear: foreign buyers aren’t driving this market and their absence isn’t what’s causing the slowdown. Domestic affordability, debt levels, and rate sensitivity are doing that all on their own.

Blaming or praising foreign policy tweaks won’t change the fundamentals.

Clarity in the noise

This market isn’t easy to read. The data gives us mixed signals. The headlines bounce between optimism and doom. But when you strip away the noise, one thing becomes clear:

We’re in the hangover phase.

The excesses of 2021 and 2022 are still being worked out. Some households are over-leveraged. Others are still underhoused. Prices have corrected, but the economic backdrop remains uncertain, especially with the Canadian economy “treading water” as TRREB puts it.

This isn’t a market to fear. But it’s not one to chase either. It’s a time to observe, to act selectively, and to resist the spin.

Final word

Don’t mistake a flicker for a flame. July gave us a pulse, not a comeback. If you’re in the market, buying, selling or advising, your edge right now is in understanding nuance. Look past the headlines. Study the inventory. Watch the clock.

And above all, stay disciplined.

The market rewards patience. Always has.

Daniel Foch

Daniel Foch is the Chief Real Estate Officer at Valery.ca, and Host of Canada’s #1 real estate podcast. As co-founder of The Habistat, the onboard data science platform for TRREB & Proptx, he helped the real estate industry to become more transparent, using real-time housing market data to inform decision making for key stakeholders. With over 15 years of experience in the real estate industry, Daniel has advised a broad spectrum of real estate market participants, from 3 levels of government to some of Canada’s largest developers.

Daniel is a trusted voice in the Canadian real estate market, regularly contributing to media outlets such as The Wall Street Journal, CBC, Bloomberg, and The Globe and Mail. His expertise and balanced insights have earned him a dedicated audience of over 100,000 real estate investors across multiple social media platforms, where he shares primary research and market analysis.

The post Why rising sales don’t mean Toronto real estate is back: Foch appeared first on REM.

In the lexicon of real estate, rebounds are often loud and unmistakable. But this one is quiet, deliberate, almost contemplative. Two months into what some hoped would be a sharp resurgence, Canada’s housing market instead moves with the slow, deliberate cadence of someone testing the ice before stepping forward. 

The message is clear. The market still hovers in a state of suspended animation, waiting for its next cue, in a world shadowed by economic risk, tariff threats and geopolitical uncertainty. Buyers are very cautious, and rightly so. They are in the driver’s seat in many markets in Canada, and those returning from the sidelines ought to exercise their hard-earned right to exist in a buyers’ market.

The second chapter of a careful rebound

In May, national home sales broke a six-month losing streak with a modest 3.6 per cent increase. June followed with another incremental gain of 2.8 per cent. Together, these two months suggest that activity, long stifled by economic uncertainty and political turbulence, is slowly returning to the system. 

Let me be clear here (I feel like Tiff Macklem when I say that). When I talk about a rebound, I’m talking about sales volume, not price recovery. In fact, sales volume is more likely to recover if prices fall further. After all, if house prices are lower, more people can afford them. If people can afford stuff, they are more likely to buy it. Real rocket surgeon stuff. 

The Greater Toronto Area again led the charge, with its transactions rebounding a cumulative 17.3 per cent since April. Yet even this resurgence barely lifts the region out of historically subdued territory. It is not so much a boom as a measured return of confidence.

The national average sale price held steady at $691,643 in June. This near carbon copy of May’s $691,299 reinforces the sense that prices have stopped sliding but remain unwilling to climb. Year over year, the national average remains 1.3 per cent lower, a gentler decline than the 1.8 per cent drop recorded the month prior.

A market in balance, but not in equilibrium

CREA’s latest report describes a market neither favouring buyers nor sellers. Yet beneath the national numbers lies a mosaic of wildly varied local conditions. Canada isn’t a monolith – different local markets tell very different stories. You hear of the bloodbath in B.C. and Ontario, but everywhere else, people are saying, “That’s not us…”

The truth is, there is no Canadian real estate market. Real estate has always boiled down to three words: location, location, location. 

Buyers vs. sellers markets

In real estate, market balance is often measured by two key indicators: the sales-to-new-listings ratio and months of inventory.

A buyers’ market occurs when supply outpaces demand, giving buyers more choice and negotiating power. This typically happens when the sales-to-new-listings ratio falls below 45 per cent or when months of inventory rises above 6.4 months.

A seller’s market emerges when demand overwhelms supply. Here, sellers hold the advantage as buyers compete for limited listings. This happens when the sales-to-new-listings ratio exceeds 65 per cent or when months of inventory drops below 3.6 months.

A range between these thresholds signals a balanced market, where neither side dominates.

The current picture across Canada

In the chart below (courtesy valery.ca), a ratio of 38 per cent in Ontario hints at a clear buyers’ market. Inventory is abundant and competition among sellers is fierce, giving buyers time to negotiate and options to compare. Vancouver favours buyers too.

In contrast, many other provinces have a ratio greater than 65, placing them firmly in sellers’ market territory. Supply is tighter, and buyers in these regions must move faster or risk losing out.

Supply slows as demand picks up

The number of newly listed properties slipped 2.9 per cent in June. This follows months of rising supply that had begun to give buyers more negotiating room in major markets. With sales up and new listings down, the national sales-to-new-listings ratio edged upward to 50.1 per cent from 47.3 per cent in May.

Inventory levels, however, remain comfortable. At the end of June, there were 206,435 properties listed across Canada, 11.4 per cent more than a year earlier. This figure sits just one per cent below the long-term seasonal average.

The months of inventory measure provides further nuance. Nationally, there are 4.7 months of inventory available, slightly below the long-term norm of five months. Alberta and Manitoba, with 2.7 and 1.8 months of inventory, respectively, are deep in sellers’ territory. British Columbia, with 6.5 months, leans towards buyers.

Prices are flatlining, but stability is fragile

After three consecutive months of near one per cent price drops earlier in the year, the past two months have brought a welcome pause. The MLS Home Price Index slipped only 0.2 per cent from May to June.

Regionally, price performance continues to diverge. Saskatchewan, Manitoba and Newfoundland all posted year-over-year gains of 8 to 12 per cent. Ontario and British Columbia saw declines of 4 per cent.

This uneven pattern underscores the importance of local context. Buyers in Vancouver or Toronto are negotiating in markets where leverage has shifted in their favour. Meanwhile, sellers in cities like Winnipeg find themselves fielding multiple offers once again.

The age of the measured move

This is not the market of rushed deals and overextended buyers. Nor is it the frozen landscape of late 2024. Instead, it is a negotiation market, one where strategy trumps speed and knowledge outweighs bravado.

Active buyers today are more analytical. They are comparing, calculating, and walking away when terms do not align with value. Sellers, for their part, are testing the waters with realistic pricing and restrained optimism.

The window for buyers may not remain open indefinitely. If interest rates ease later in the year, sidelined demand could accelerate into autumn. That shift would narrow the negotiating room currently available.

What comes next

June’s CREA data, much like May’s, does not herald a runaway market. It reinforces a theme that has been building for months, i.e. the return of discipline.

As I wrote in my May op-ed, this phase of Canadian real estate rewards those who move with precision rather than haste. That lesson has only deepened.

Daniel Foch

Daniel Foch is the Chief Real Estate Officer at Valery.ca, and Host of Canada’s #1 real estate podcast. As co-founder of The Habistat, the onboard data science platform for TRREB & Proptx, he helped the real estate industry to become more transparent, using real-time housing market data to inform decision making for key stakeholders. With over 15 years of experience in the real estate industry, Daniel has advised a broad spectrum of real estate market participants, from 3 levels of government to some of Canada’s largest developers.

Daniel is a trusted voice in the Canadian real estate market, regularly contributing to media outlets such as The Wall Street Journal, CBC, Bloomberg, and The Globe and Mail. His expertise and balanced insights have earned him a dedicated audience of over 100,000 real estate investors across multiple social media platforms, where he shares primary research and market analysis.

The post The market wakes, but refuses to run: Foch appeared first on REM.

• Prices are down 5.4 per cent
• Sales are down 2.4 per cent
• New listings (supply) is up slightly 7.7 per cent
• Active listings (inventory) is up a whopping 30.8 per cent
• Properties are taking longer to sell, with a 30 to 40 per cent increase in days on market 

In fact, active listings finally jumped up to the point that we’re at the highest number we’ve ever seen:

So… why am I not surprised? 

If you’ve been reading my ramblings for a while, you’ve probably picked up that for a long time, I felt that Canada’s next (read: current) real estate downturn would look a lot like our last downturn, which took place in the 1990s. 

Before you interpret this as a self-aggrandizing introduction to this article, I want you to understand that I’ve been saying this since 2017’s market peak. So, as of this year, I’ve been wrong more years than I’ve been right:

Wrong – 2019, 2020, 2021, 2022
Right – 2023, 2024, 2025 

In my defense I will say that 2018 likely would’ve ended up being a similar outcome if the pandemic and the policy response of 0.25 per cent overnight rates had not happened – but I don’t think I’ll need to defend myself for this one, I just need to wait a year or two, it seems.

Big shoutout to Xelan – one of my favourite substack writers (https://xelan.substack.com/) for vindicating me a bit with this chart below.

GTA housing market’s uneasy calm 

The Greater Toronto Area housing market has long moved on from the frenetic volatility of its pandemic-era highs and market-correction lows. The rapid transactions and nauseating price discovery swings up and down are now relics of a different time. In their place, a steadier market, where buyers take their time, sellers adapt to new conditions and policymakers watch cautiously from the sidelines.

June’s TRREB Market Watch report points to a market in gradual adjustment, and importantly, not stagnation. Prices are down, inventory has grown and mortgage rates, though still elevated, had begun to give some optimism to buyers. And therein lies the rub. 

The problem with mortgage rates

A bit of a standoff has evolved between consumers and their lenders – or at least their lenders’ economists. On one hand, buyers are signaling clearly that they expect mortgage rates to fall further. So much so that buyers shifted their demand to shorter-term fixed-rate and variable-rate mortgages:

On the other hand, bank economists are signalling that the Bank of Canada’s rate-cutting phase might be coming to an end. Recent articles in the Financial Post stated that:

1. “Canadians looking for more interest rate relief might be out of luck / RBC says the Bank of Canada is done with rate cuts for this cycle” 
2. “More economists think the Bank of Canada is done cutting interest rates / ‘Shouldn’t even be thinking about thinking about when to cut rates,’ says Scotiabank’s Derek Holt”

And so it stands to reason that rather than igniting a rush of demand, changes to the interest rate environment have ushered in a period of measured activity as buyers weigh their options carefully.

The result is an uneasy calm in a market searching for direction.

More choice, less conviction

At first glance, the data appears to favour buyers. Active listings surged 30.8 per cent year over year, surpassing 31,600 homes on the market. New listings rose 7.7 per cent. Prices have softened too, with the average GTA home now selling for $1.1 million, a 5.4 per cent decline from last June. 

But sales suggest a more restrained response. June recorded 6,243 transactions, a slight decline of 2.4 per cent compared to a year ago. Homes lingered on the market for an average of 26 days while relisted properties often took 42 days to find a buyer. 

Buyers are clearly still taking their time. Many remain wary of overextending themselves in an economy marked by uneven job growth and geopolitical uncertainty. Even with borrowing costs slightly lower than last year, the aftershocks of previous hikes continue to weigh on household decisions, leaving many reluctant to rush into major commitments.

The urban-suburban divide

Within the GTA, the divide between Toronto’s 416 and the surrounding 905 regions is widening.

In Toronto proper, there are faint signs of renewed confidence. Detached homes saw their average price slip 6.5 per cent to $1.64 million and this modest relief appears to have drawn more affluent buyers back into the market. Semi-detached homes outperformed, posting an 18.6 per cent increase in sales year over year, suggesting that family buyers are reconsidering urban living after years of suburban migration.

In Toronto, a very supply-constrained market, it seems that decreases in price are producing the outcome we should expect them to: if house prices fall, more people can afford the houses, so more people buy the houses. 

In contrast, the 905 appears to tell a different story – and this is where you’ll want to pay attention to what the market is communicating about its confidence in that market. Lower prices have not resulted in more sales. Detached prices fell in lockstep with Toronto’s to an average of $1.3 million, but sales dipped 5.7 per cent. Semi-detached sales also declined, and so did townhouse sales. 

Confidence is the missing ingredient

Jason Mercer, TRREB’s chief information officer, noted that additional interest rate cuts and more stable global trade conditions could help rebuild consumer confidence. Current mortgage rates, though lower than their 2024 highs, remain elevated enough to strain affordability. A BMO survey earlier this year found that nearly 67 per cent of potential homebuyers planned to delay purchases until rates fell further. 

So… given that their peers like RBC and Scotiabank aren’t anticipating further rate cuts, is the market at risk of finding a stalemate? Even with OSFI reviewing the B-20 stress test, financial levers alone may not resolve the slowdown. Recent economic volatility has shifted expectations too and this has left buyers questioning whether the market has truly stabilized.

According to CMHC’s 2025 Mortgage Consumer Survey, more than half of first-time buyers cite concerns about overpaying in a market that still feels unpredictable. Instead of the fear of missing out that defined the pandemic housing frenzy, caution now dominates buyer psychology.

The unspoken factor: Safety and social stability

John DiMichele’s remarks about rising home invasions and carjackings may seem like an outlier in a housing report, but they reflect an often-overlooked reality: the housing market does not exist in a vacuum. Public safety perceptions matter. A home is a sanctuary and not just an asset. When that sense of security is undermined, even marginally, it can weigh on demand.

The federal government’s proposed crime bill may strengthen public trust in time, but in the interim, unease lingers.

Generational shifts and the changing buyer profile

It is impossible to ignore the generational dynamics shaping today’s market. Millennials remain the dominant first-time buyer cohort in the GTA, while older Gen Zers, many of whom held off purchasing during the pandemic, are only now beginning to test the waters of homeownership. Yet their approach differs from earlier generations. Saddled with a cost-of-living crisis, they are deliberate, cautious, and less swayed by market hype.

This emerging cohort prizes flexibility and affordability. They are more willing to consider alternative ownership models if it means avoiding the overleveraged mistakes they witnessed during the last boom.

A market in search of momentum

I’ve alluded to this in my previous op-eds on the GTA market: for buyers, the current environment offers negotiating power unseen in years. Prices are relatively soft, inventory is plentiful, and conditional offers are back on the table. 

Yet the broader trajectory of the GTA housing market hinges on more than this. Until confidence returns, rooted in economic and geopolitical certainty, the market will continue its measured, cautious pace.

The verdict: still a pause 

June’s TRREB report captures a housing market at a crossroads. Prices have eased, inventory has surged, but conviction remains elusive. Toronto and its suburbs are no longer dancing to the same frantic tune of the previous years. Instead, they move hesitantly, waiting for a cue that may come from lower rates, improved economic signals, or simply time.

For now the market is still caught in a rare moment of quiet, a pause that will either reset the rhythm or set the stage for the next great swing.

Daniel Foch

Daniel Foch is the Chief Real Estate Officer at Valery.ca, and Host of Canada’s #1 real estate podcast. As co-founder of The Habistat, the onboard data science platform for TRREB & Proptx, he helped the real estate industry to become more transparent, using real-time housing market data to inform decision making for key stakeholders. With over 15 years of experience in the real estate industry, Daniel has advised a broad spectrum of real estate market participants, from 3 levels of government to some of Canada’s largest developers.

Daniel is a trusted voice in the Canadian real estate market, regularly contributing to media outlets such as The Wall Street Journal, CBC, Bloomberg, and The Globe and Mail. His expertise and balanced insights have earned him a dedicated audience of over 100,000 real estate investors across multiple social media platforms, where he shares primary research and market analysis.

The post GTA market holding its breath for what’s next: Foch appeared first on REM.

Don’t miss out—join us online for REM’s monthly market breakdown on June 24 at 2 PM ET. REM, columnist Daniel Foch will analyze CREA’s latest stats, regional variations and what shifting sentiment means for Realtors—register here.

After six straight months of declining sales, Canada’s housing market finally showed signs of life in May. National home sales climbed 3.6 per cent month-over-month, the first gain since last November. 

But before anyone calls it a comeback, let’s be honest about what the data actually says.

If this is our so-called “pent-up demand,” the market’s in no rush. In the first quarter, uncertainty around the Canadian election prevented buyers from making decisions. The industry assumed this activity would get pulled into May and June, once the election was behind us. This assumption was overestimated, albeit correct. 

Yes, activity picked up. But it didn’t take off. And while buyers re-entered the ring, they were met by a wave of sellers with more speed and confidence.

Canadian Real Estate Association (CREA)’s latest report confirms what observers like me have already been signaling: new supply continues to outpace new demand, and the much-awaited rebound has landed more like a soft echo than a rally.

What’s unfolding is a quiet rebalancing, and if you’re not reading between the lines, you’re missing the most important shift we’ve seen in over a year.

A market on the move, but not in a hurry

May’s 3.6 per cent sales bump was driven largely by Toronto, Calgary, and Ottawa, cities with enough volume to move the national needle. But even with that lift, overall activity remained 4.3 per cent below the same month last year. The chart below shows the sales trend from 2007 onwards.

So yes, there was movement. But not velocity.

There’s no urgency here. Buyers are still cautious. And that, in itself, is telling.

Inventory is building. Slowly, steadily, strategically.

What’s changing faster than demand is supply. New listings climbed another 3.1 per cent in May, the third straight monthly gain. At 201,880 active listings, inventory is now up 13.2 per cent year-over-year, and closing in on the long-term average.

This is a measured return of confidence from sellers who, it now feels, were sitting on the sidelines through most of 2024, and is enough to tilt the market dynamic.

The national sales-to-new listings ratio held steady at 47 per cent, well below the 10-year norm of 55 per cent. Technically, the market is balanced. Functionally, it’s beginning to lean in favour of buyers.

That’s the signal under the surface: choice is on the rise, and with it, leverage. It’s a pattern that closely resembles what’s been unfolding in the GTA, where an increase in active listings and subdued demand has given buyers significantly more negotiating power and time than they’ve had in recent memory.

Prices have leveled, but haven’t rebounded

After several months of national price declines, May brought something close to a pause. The MLS Home Price Index slipped just 0.2 per cent month-over-month, while the actual national average sale price settled at $691,299, down 1.8 per cent from May 2024.

Sellers are returning in greater numbers, as evidenced by rising inventory, but they’re still careful when it comes to pricing. Most are listing to test buyer interest, not to stretch the market.

Buyers, for their part, are starting to re-engage, but without urgency. The uptick in May sales signals renewed interest, yet not enough to create upward pressure on prices. While there are early signs that values may be stabilizing, there’s still no convincing momentum to suggest a rebound is underway.

Regionally, the picture is mixed. Ontario and British Columbia saw average prices decline by roughly 3 per cent to 4 per cent, weighing on the national average. Elsewhere in the country, average prices moved higher, with Manitoba, Quebec, Saskatchewan, and Newfoundland and Labrador posting year-over-year gains of 8 per cent to 10 per cent.

In short: the fire isn’t raging, but the market’s not frozen either. Regional conditions are now doing most of the heavy lifting.

We’ve entered a negotiation market

This is not a hot market. It’s not a correction, either. It’s something in between, which I’d like to call a negotiation market, where nothing is guaranteed, and everything is up for discussion.

And in such a market, knowledge is leverage.

Buyers have the upper hand, for now. Inventory is climbing, options are widening, and urgency is low. For the first time in years, the market is giving them space to think, to compare, and most importantly, to negotiate. But that window is finite. If rates fall later in the year, demand could pick up again, narrowing that gap.

In fact, some relief has already arrived. According to the Q1 2025 Housing Affordability Monitor from the National Bank of Canada, mortgage rates have edged down, easing the burden of ownership slightly. The national MPPI, mortgage payments as a percentage of income, dropped to 55.4 per cent, its lowest level in nearly three years. 

Sellers aren’t out of options, but strategy matters more than ever. This isn’t a list-it-and-leave-it market. It rewards precision: pricing to match the moment, staging that resonates, and a narrative that justifies value. 

Still a market for the measured

The market performance in May does not seem like the beginning of a boom. It’s the return of discipline.

Buyers are re-entering the arena, not in droves, but with intention. They’re more cautious, more analytical, and more willing to walk away. This time, it’s not about chasing prices. It’s about making informed moves when the terms are right. The market is offering room to negotiate, and savvy buyers are taking it.

What comes next won’t be about who moves first, but who moves smartest.

Because in this new phase of Canadian real estate, it won’t be the boldest who wins. It will be the best-informed.

Daniel Foch

Daniel Foch is the Chief Real Estate Officer at Valery.ca, and Host of Canada’s #1 real estate podcast. As co-founder of The Habistat, the onboard data science platform for TRREB & Proptx, he helped the real estate industry to become more transparent, using real-time housing market data to inform decision making for key stakeholders. With over 15 years of experience in the real estate industry, Daniel has advised a broad spectrum of real estate market participants, from 3 levels of government to some of Canada’s largest developers.

Daniel is a trusted voice in the Canadian real estate market, regularly contributing to media outlets such as The Wall Street Journal, CBC, Bloomberg, and The Globe and Mail. His expertise and balanced insights have earned him a dedicated audience of over 100,000 real estate investors across multiple social media platforms, where he shares primary research and market analysis.

The post Foch: Pent-up demand? Buyers are in no rush appeared first on REM.