Canadian real estate showed minor improvement in August but remains far from normal. Existing home sales rose slightly, according to data from the Canadian Real Estate Association (CREA). However, the increase wasn’t enough to offset a record number of new listings, helping drive the sharpest monthly price drop in over a year.
Canadian Real Estate Prices See Sharpest Drop In Over A Year
CREA benchmark price: The price of a typical home across Canada.
Source: CREA; Better Dwelling.
Canadian real estate prices continued to slip last month. The price of a typical home fell 0.9% (-$6,500) to $686,800 in August, and are now down 3.4% (-$24,000) from last year. The monthly drop was the largest in over a year, and prices have returned to the lowest point since March 2021.
Since hitting an all-time high back in March 2022, a typical home has plunged 19.4% (-$164,800). Even though borrowing costs have fallen, prices are falling even faster—not slower.
Canadian Real Estate Sales Improve, Remain Historically Weak
Canadian real estate sales: August MLS home sales.
Source: CREA; Better Dwelling.
Canadian home sales are improving, but they remain miles away from normal volumes. There were 40,257 homes sold in August, up 1.86% from last year. While higher than last year, it was still below 2023 levels and historically weak. Prior to 2020, one would have to go all the way back to 2012 to find an August this weak. The market is showing signs of stabilization, but let’s not conflate that with a return to normal.
Canadian Real Estate Sellers Set A Monthly Record
Canadian real estate inventory: August new listings.
Source: CREA; Better Dwelling.
Canadian real estate sellers grew much faster than buyers, explaining the price drops. There were 75,959 new listings in August, up 6.14% from last year. It was the most new listings for the month on record, growing at a pace over three times greater than sales.
Canadian real estate showed some minor signs of improvement, with a bump in sales. Over the past few months, sales have consistently come in higher than last year. This likely reflects pent-up demand from buyers who delayed purchases but can still afford today’s prices. Even so, sales remain historically low, especially when compared to record inventory and accelerating price declines.