Is The Canada Housing Market showing Signs of Revival?

Canada's tight housing market may see some relief as new sellers enter the market, but it may not be enough to balance the supply and demand issues.

Canada's tight housing market may see some relief as new sellers enter the market, but it may not be enough to balance the supply and demand issues. According to a new report from the Royal Bank of Canada (RBC), there has been a significant increase in the number of new listings in some of Canada's largest markets, including Calgary, Toronto, and Vancouver.

In May 2023, there was a 27% month-over-month increase in new listings in Calgary, with home resale sales up more than 6%. Meanwhile, Toronto experienced a 17% increase in new home listings, and Vancouver saw a 15% increase over the previous month. This influx of new sellers is good news for buyers, but RBC economist Robert Hogue cautions that it may only provide a temporary cool-down in light of the supply shortages in most markets.

Is The Canada Housing Market showing Signs of Revival?

The Canadian Real Estate Association (CREA) reports that demand from out-of-market buyers far exceeded supply from sellers in the resale market in April 2023. Sales on new listings increased to 70.2%, compared to the long-term average of 55.1%. This tight supply has caused buyers to compete for a limited number of properties, driving prices up.

Hogue predicts that house prices will continue to rise, but the increase in new sellers can act as "market stabilizers", dampening demand from buyers who cannot afford to pay and encouraging more sellers to enter the market. However, more sellers will be needed in the coming months to bring the market to equilibrium.

The Canada housing market is showing signs of resurgence as new sellers enter the market, but it may not be enough to balance the supply and demand issues. The influx of new listings is good news for buyers, but more sellers will be needed to bring the market to equilibrium and prevent further price increases.