Canada’s housing slump is officially over—in the opinion of a small share of buyers, apparently. The rest of Canada? Nah. Canadian Real Estate Association (CREA) data shows home prices climbed in May. Sales and new listings both fell, delivering a slightly tighter market than last year. However, the demand balance remains at a level not seen outside of the early 90s real estate crash.
Canadian Real Estate Prices Climb For 4th Straight Month
CREA composite HPI: The unadjusted price of a typical home.
Source: CREA; Better Dwelling.
The price of a typical home climbed 0.23% (+$1.5k) to $667,700 in May, marking a fourth straight increase. Prices remain 4.12% (-$28.7k) lower than last year, and 20.6% (-$173.6k) below the record high set in March 2022. In other words, there’s positive momentum, but a long way to go before anything that resembles a recovery.
Canadian Real Estate Sales Fall, Weakest May In At Least 20 Years
Canadian real estate sales: Unadjusted, May.
Source: CREA; Better Dwelling.
Climbing prices weren’t driven by sales. There were 49,525 sales in May, down 5.1% from last year. The drop is enough to make it the weakest May volume in at least 20 years. This is a much weaker turnout than expected for what’s usually the seasonal peak for the market.
Fewer New Home Listings, But A Lot More Sellers Than Usual
Canadian real estate new listings: Unadjusted, May.
Source: CREA; Better Dwelling.
The drop in sales is only beaten by the fall in new listings. There were 101,270 new listings in May, 7.9% fewer than last year. It’s a sharp drop but considering last year was a record high, there’s no need to panic about dwindling inventory. We need to go all the way back to 2017 to find another May with more new listings. The surge in 2017 was just ahead of Ontario implementing its non-resident buying tax.
The drop in new listings was larger than the one in sales, boosting relative demand. The sales-to-new-listings ratio (SNLR) came in at 46.4% in May, climbing 1.3 points from last year. At a macro level, this is considered a balanced market priced right for the scale of demand. But it’s important to understand that the industry’s guidelines only provide a general overview. A divergence from the normal range is a much stronger signal, and this one is worth paying attention to.
The SNLR has little precedent in this range, so “balanced” isn’t necessarily balanced. Aside from this May and May 2025, one has to go all the way back to 1995 to find another report where it fell below 50% in May. The SNLR is at similar levels to the early 90s, when Canada’s last major real estate crash occurred. A real estate correction where prices don’t actually correct, eh? How unique.
My bet’s on skewed modeling weights?
Good guess. TSV condo to SF, so prices are down for single-family units but the composite is still climbing. At least in Toronto, anyway.
Open Letter to the Editors of Better DwellingYour recent analysis, “Canadian Real Estate Just Flashed A Sign Not Seen Since The 90s Crash,” relies on an outdated architectural playbook that fundamentally misreads the current structural reality of the Canadian macroeconomic landscape. Drawing a direct parallel to the 1995 Sales-to-New-Listings Ratio (SNLR) to imply a looming systemic crash is a flawed diagnostic approach for several critical reasons:The Fallacy of the 1990s Analog: The mid-1990s correction was driven by double-digit interest rates, massive public debt crises, and severe demographic stagnation. Today, the fundamental baseline of the market is anchored by historic immigration volumes, an absolute structural deficit in housing starts, and aggressive institutional capital retention.Volume Suppression is Policy-Driven, Not Demand-Driven: The 20-year low in transaction volumes is not a reflection of a disappearing buyer pool. It is an artificial supply-and-demand ceiling manufactured by stress-test regulations, central bank rate positioning, and capital holding patterns. The demand remains latent, compressed, and waiting for liquidity channels to ease.Price Resilience Contradicts the Crash Narrative: A genuine market crash requires a cascading capitulation of value. Instead, prices have risen for four consecutive months. Sellers are well-capitalized and are deliberately choosing to hold inventory rather than liquidate at a loss, exposing the “balanced market” metric as an illusion.Ignoring the Sovereign Capital Layer: Traditional real estate metrics look at individual domestic buyers. They completely fail to account for the massive influx of corporate equity, sovereign fund investments, and institutional entities that permanently absorb residential real estate as a tier-one asset class, preventing a true asset collapse.To view today’s market strictly through the lens of a 30-year-old SNLR equation is to completely miss the transformation of Canadian housing from local shelter into a highly protected, permanently indexed global asset.Respectfully,Edward H.C. Graydon
The award for worst take goes to….
Seriously, you have a fundamental misunderstanding of basic concepts like interest rates. The actual rate isn’t relevant, it’s the velocity of change.
Not knocking on you, kudos for trying to learn. But this is literally in the first unit of any financial designation. I don’t know if you have a job (it seems the majority of people who have time to correct strangers in areas they don’t understand don’t), but you might want to develop those soft skills.
The ole “this time’s different” call.
Do people not realize this is what happened to Europe right before they were forced to consolidate its currency into the Euro to prevent defaulting on its debt, right?
This is AI-generated garbage. Has all the hallmarks: awkward “title-case” bullet points, Frankenstein formatting glitch, and faux-academic jargon. I doubt this is “Edward Grayson” so much as a clunky rebuttal cooked up by some chat bot.