“The bottom line here is that there is a big disconnect materializing between conditions in Ontario and most of the rest of the country,” says BMO Director and Senior Economist Robert Kavcic.
At the end of 2024, Canada’s housing market showed stark regional differences, Kavcic notes in his monthly Canadian Housing Monitor. Ontario remained sluggish, with Toronto’s condo market seeing a surge in supply and falling prices. Meanwhile, markets in many other provinces pushed toward new highs.
Existing home sales fell 5.8 per cent in December on a seasonally adjusted basis, though sales were still up 19.2 per cent compared to a year earlier. “Sales volumes are now running almost right in line with the 10-year average,” Kavcic says, sourcing CREA. He notes that 2024 was the third most “valuable year” on record for Canadian real estate, with the total dollar value of transactions rising 8.2 per cent; only 2021 and 2022 saw more activity.
Supply remains stable despite rising listings
New listings climbed 10.4 per cent year-over-year, yet inventory levels remained stable. The months’ supply of homes for sale edged up to 3.9, close to the 4.0 average of the past year. The national sales-to-new listings ratio, a key measure of market balance, held at 56.9 per cent in December.
“Balanced overall market conditions leave price trends stable to modestly improving,” Kavcic explains. The MLS benchmark price increased at a 4.1 per cent annualized rate in December, though it was still 0.2 per cent lower than the previous year.
Toronto’s condo market takes a hit
The big story is the gap between Toronto and much of the country. Kavcic says, “Toronto is the last remaining buyers’ market among 23 major cities we track.” The city’s sales-to-new listings ratio weakened to 38.6 per cent in December as (we’ve seen) condo listings flooded the resale market.
“The glut of condos hitting the resale market in that city is clearly marking the weak spot in Canadian real estate,” he adds. Toronto condo prices dropped 3.7 per cent year-over-year, and most of Southern Ontario “is also still relatively soft.”
Eastern and prairie markets are thriving
Other regions tell a different story. “Markets in Quebec and further east are tight almost across the board as steadily rising sales outpace increases in new listings,” Kavcic says. Quebec, New Brunswick and Nova Scotia each have less than four months of housing supply.
Cities like Calgary, Edmonton, Regina and Winnipeg remain strong sellers’ markets, outperforming national averages for market balance and price growth. “Prices in these markets have all returned to record highs relative to the recent correction,” Kavcic notes.
B.C. stuck in the middle
British Columbia sits somewhere in the middle. The Vancouver market has regained just over half of the losses it suffered after the 2022 correction, but benchmark prices are still about 4 per cent below peak levels.
A tale of two markets
“When we hear about swampy market conditions and stagnant prices well off the 2022 peak, that is largely an Ontario story, and even more specifically a condo story,” Kavcic says. “At the same time, there are now regions of the country where housing market activity and resale prices are legitimately strong.”