CANADA HOUSING MARKET: RECOVERY IN RESALE ACTIVITY APPEARS UNDERWAY…FOR NOW
SUMMARY
For a fourth consecutive month, national housing sales increased in July while new listings were almost unchanged. Both indicators of resale market conditions we track—the sales-to-new listings ratio and months of inventory—tightened from June to July.
National housing sales robustly increased 3.8% in July (m/m sa), with a significant contribution (above 40%) from a strong rise in Toronto sales. National sales have been increasing since April of this year and have since increased by 11.2% (sa figures) and recovered more than half their losses from November 2024 (most recent peak) to March. National sales increased by 6.6% (nsa) since July 2024.
National new listings were nearly unchanged in July, increasing by a modest 0.1% (sa) from their June level following a near 3% decline from May to June. With this mild increase in July, new listings continued their upward trend that started in Spring 2023. New listings increased nationally by 5.9% (nsa) from July 2024 to July 2025.
Both indicators of market conditions we track suggest a continued tightening nationally from June to July. With the robust rise in sales and the mild increase in new listings, the national sales-to-new listings ratio gained almost 2 percentage points over this period, increasing from 50.1 to 52% (sa figures). This indicator is still in the lower half of the range for balanced conditions (of 44.7 to 66.1%). Months of inventory also suggest a tightening in national resale conditions from June to July, declining from 4.6 to 4.4. This indicator was 0.8 month below its long-term pre-pandemic average in July. As for several previous months, it continued to be below its long-term average in all provinces, except for British Columbia and Ontario (1 month above their respective average in both cases).
The national MLS House Price Index was unchanged from June to July (sa figures) as the price increase for two-storey units was fully offset by price declines for apartments and townhouses. Nationally, the MLS HPI declined -3.4% (nsa) in July from the same month in 2024, with every unit-types contributing to this 12-month decline, with the largest observed again for apartments.
Sales increased in about 2/3 of the local markets we track while new listings increased in just above ½ of them. Most Ontario markets posted an increase in sales in July, a sharp change from June’s performance when reported Ontario markets were all showing a monthly decline.
Housing resale conditions—as measured by the sales-to-new listings ratio—were deemed balanced in nearly 60% of the local markets we track, and buyers favourable for close to 1/4 of them, and all in British Columbia and Ontario.
Above 10% monthly increases in sales were observed from June to July for St. Catharines (16.5% sa), Brantford (13.1%), Toronto (13%), Saint John (NB; 10.7%) and Hamilton-Burlington (+10.6%). Largest monthly declines in sales were observed for PEI (Charlottetown; -6.2%), Newfoundland and Labrador (St. John’s; -5.3%) and Victoria (-4.8%).
IMPLICATIONS
There are now additional signs that a housing sector recovery is possibly underway with sales rising for a fourth consecutive month in July and having recovered since more than half of their losses from last November to March of this year. While potentially too soon to claim this recovery will be sustained, it is nevertheless consistent with what we would expect in a world without the elevated uncertainty from global trade tensions triggered by the new U.S. administration since its election.
As mentioned in previous reports, from our econometric model of the Canadian (and U.S.) economy and without this unusual trade-related noise, we would already be witnessing a sustained recovery in housing activity and prices. The increase in trade tensions since early this year and their expected impact on economic and income conditions for potential buyers in Canada have created a high degree of uncertainty and strong headwinds for housing demand as mentioned in recent reports. We maybe at a point now where potential buyers have started to discount this uncertainty in their planning given the feared significant negative impacts on Canada’s economy have yet to become noticeable. Hence, July sales performance is consistent with a possible setting of trade-uncertainty fatigue we alluded to in our previous report, which is making more buyers to look through all the noise. But again, any increase in trade tensions could further delay this recovery or even reverse it.
DISCLAIMER
This report has been prepared by Scotiabank Economics as a resource for the clients of Scotiabank. Opinions, estimates and projections contained herein are our own as of the date hereof and are subject to change without notice. The information and opinions contained herein have been compiled or arrived at from sources believed reliable but no representation or warranty, express or implied, is made as to their accuracy or completeness. Neither Scotiabank nor any of its officers, directors, partners, employees or affiliates accepts any liability whatsoever for any direct or consequential loss arising from any use of this report or its contents.
These reports are provided to you for informational purposes only. This report is not, and is not constructed as, an offer to sell or solicitation of any offer to buy any financial instrument, nor shall this report be construed as an opinion as to whether you should enter into any swap or trading strategy involving a swap or any other transaction. The information contained in this report is not intended to be, and does not constitute, a recommendation of a swap or trading strategy involving a swap within the meaning of U.S. Commodity Futures Trading Commission Regulation 23.434 and Appendix A thereto. This material is not intended to be individually tailored to your needs or characteristics and should not be viewed as a “call to action” or suggestion that you enter into a swap or trading strategy involving a swap or any other transaction. Scotiabank may engage in transactions in a manner inconsistent with the views discussed this report and may have positions, or be in the process of acquiring or disposing of positions, referred to in this report.
Scotiabank, its affiliates and any of their respective officers, directors and employees may from time to time take positions in currencies, act as managers, co-managers or underwriters of a public offering or act as principals or agents, deal in, own or act as market makers or advisors, brokers or commercial and/or investment bankers in relation to securities or related derivatives. As a result of these actions, Scotiabank may receive remuneration. All Scotiabank products and services are subject to the terms of applicable agreements and local regulations. Officers, directors and employees of Scotiabank and its affiliates may serve as directors of corporations.
Any securities discussed in this report may not be suitable for all investors. Scotiabank recommends that investors independently evaluate any issuer and security discussed in this report, and consult with any advisors they deem necessary prior to making any investment.
This report and all information, opinions and conclusions contained in it are protected by copyright. This information may not be reproduced without the prior express written consent of Scotiabank.
™ Trademark of The Bank of Nova Scotia. Used under license, where applicable.
Scotiabank, together with “Global Banking and Markets”, is a marketing name for the global corporate and investment banking and capital markets businesses of The Bank of Nova Scotia and certain of its affiliates in the countries where they operate, including; Scotiabank Europe plc; Scotiabank (Ireland) Designated Activity Company; Scotiabank Inverlat S.A., Institución de Banca Múltiple, Grupo Financiero Scotiabank Inverlat, Scotia Inverlat Casa de Bolsa, S.A. de C.V., Grupo Financiero Scotiabank Inverlat, Scotia Inverlat Derivados S.A. de C.V. – all members of the Scotiabank group and authorized users of the Scotiabank mark. The Bank of Nova Scotia is incorporated in Canada with limited liability and is authorised and regulated by the Office of the Superintendent of Financial Institutions Canada. The Bank of Nova Scotia is authorized by the UK Prudential Regulation Authority and is subject to regulation by the UK Financial Conduct Authority and limited regulation by the UK Prudential Regulation Authority. Details about the extent of The Bank of Nova Scotia's regulation by the UK Prudential Regulation Authority are available from us on request. Scotiabank Europe plc is authorized by the UK Prudential Regulation Authority and regulated by the UK Financial Conduct Authority and the UK Prudential Regulation Authority.
Scotiabank Inverlat, S.A., Scotia Inverlat Casa de Bolsa, S.A. de C.V, Grupo Financiero Scotiabank Inverlat, and Scotia Inverlat Derivados, S.A. de C.V., are each authorized and regulated by the Mexican financial authorities.
Not all products and services are offered in all jurisdictions. Services described are available in jurisdictions where permitted by law.