The market wakes, but refuses to run: Foch

It is rare to see back-to-back housing reports that feel like mirror images. Yet Canadian Real Estate Association (CREA)’s data for June reads almost like a script re-run of May. Another modest rise in sales. Another month of flat prices. Another subtle shift in market dynamics that feels more whispered than shouted.

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.