CANADA HOUSING MARKET: HOUSING RESALE ACTIVITY PICKED UP IN MAY 2025…ARE WE WITNESSING EASING EFFECTS FROM TRADE-RELATED UNCERTAINTY ON HOUSING DEMAND?
SUMMARY
National housing resale activity increased from April to May with both sales and new listings rising, leaving market conditions relatively unchanged over this period.
Sales increased 3.6% (sa figures) nationally from April to May, following a 0.8% increase from March to April (revised from an initially published -0.1% decline). Despite monthly increases in the last 2 months, national sales were -4.3% (nsa) weaker in May 2025 than in May 2024. In May 2025, national sales were about 35% lower than their February 2022 level, the month just before the Bank of Canada started its tightening cycle for its policy rate.
National new listings rose 3.1% (m/m sa) in May and were 8% higher (nsa) than their level in the same month of 2024. In May, new listings continued their upward trend since their recent trough in March 2023. From this period to May 2025, national new listings increased by more than 40% (from sa figures).
With the modestly stronger increase in national sales than for new listings, the national sales-to-new listings ratio tightened negligibly, rising from 46.8% to 47.0% from April to May, suggesting resale conditions stayed essentially unchanged over this period and are still within the estimated balanced conditions range, but very close to the buyers’ favouring conditions zone. Indeed, observed (sa) levels for this indicator in the last 3 months were the lowest since February 2009.
Months of inventory, another indicator of market conditions, also tightened very marginally from April to May nationally, edging down from 5.0 to 4.9 months (sa figures) and still near the pre-pandemic period average of 5.2 months in May. As was the case in April, months of inventory were below their long-term (pre-pandemic) average in all provinces except in British Columbia (+2 months) and Ontario (+1.8 months), with Quebec and the Atlantic provinces still showing the largest negative deviations from their respective long-term average, with the largest posted in New Brunswick (with a -5.5-month deviation).
The national MLS House Price Index edged down by -0.2% (sa) from April to May, the slowest monthly decline since January of this year. From the same month in 2024, this price index declined -3.5% (nsa) in May. From April to May, most unit-types—except 1-storey units—contributed to the monthly decline in this house price index while they all contributed to its decline since May 2024. This price index has been on a downward trend since August 2023 and, in May 2025, was at its weakest (sa) level since May 2021 and near 17.5% below its peak achieved in February 2022.
In April, sales increased in about ¾ of the markets we track while new listings increased in 60% of them.1 Housing market conditions—as measured by the sales-to-new listings ratio—tightened in slightly more than 70% of the tracked markets. In May, these conditions were deemed balanced for 40% of these markets and buyers’ favourable for 36% of them.
Above 10% monthly sales increases were observed for Brantford (24.3%; sa figures), Thunder Bay (18.1%), Windsor (13%) and Hamilton-Burlington (10.4%). Monthly sales declines were observed for ¼ of the markets we track, with the largest declines reported for Quebec City (-7.2%), Halifax (-3.7%) and Lethbridge (-3.3%).
Above 10% increases in new listings from April to May were observed for Thunder Bay (16.7%; sa), Edmonton (12.2%), Barrie (12.1%), Brantford (11.7%) and Regina (10.7%). The largest declines in new listings over this period were observed for Lethbridge (-9.8%), Moncton (-6.7%), and St. John’s (NL; -6.3%).
IMPLICATIONS
Housing sales picked up in May, and this pickup was observed in most reported markets we track, which is encouraging for those wishing for housing market conditions to tighten and prices to rise. As reported in previous reports, headwinds on housing demand from the ongoing trade war triggered by the U.S. administration have so far offset tailwinds from the decline in the monetary policy rate by 225 basis points from June 2024 to March 2025 as well as recent government initiatives for first-time home buyers. Clearly, if uncertainty about future trade tensions and their impact on employment and income conditions start easing, or even stabilize, we expect to see a sustained tightening in housing resale conditions, thereby leading the MLS HPI to resume its long-term upward trend. However, it is likely too soon to claim victory given the still existing tensions for global trade and the volatility of housing resale data.
1 May 2025 information was incomplete at time of writing this report for Guelph, Kingston, London, Ottawa, Peterborough and St. Catharines. Therefore, these markets are not included in the Housing Market Watch table.
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