Canadian Real Estate Prices See Further Slowing, As Demand Falls Faster Than Supply

Canada’s red hot real estate market continued to cool, according to new numbers from the industry. Canadian Real Estate Association (CREA) data shows the seasonally adjusted sales to new listings ratio (SNLR) fell in August. The relative measure of demand is one of the core indicators used to determine how tight the market is. Since peaking earlier this year, demand has eased allowing supply to rise towards healthier levels. As the situation improves, the market is naturally seeing annual price growth slow.

Canadian Price Growth Slows, As Demand Pressures Ease

Supply pressures further eased at the national level, as the sales to new listings ratio (SNLR) fell further. The seasonally adjusted SNLR was 72.4% in August, down from 73.6% the month before. It’s a tight market in the grand scheme of things, but there certainly is a lot less pressure on inventory than there was at the beginning of the year. 

Canadian Real Estate Demand and Price Growth

The sales to new listings ratio (SNLR) compared to the annual rate of benchmark price growth, for composite homes across Canada.

Source: CREA; Better Dwelling.

The annual rate of growth for the benchmark price continues to taper, responding to the prior easing of inventory. Seasonally adjusted prices are up 21.3% in August, shaving more than a point off of the 22.4% a month before. Yeah, home prices across the country are generally up more than a fifth from last year. Not exactly hurting if you bought last year, but a slowing of price growth is likely to ease the FOMO pressure buyers feel. 

Toronto Real Estate Has Seen Annual Price Growth Slow

Greater Toronto real estate wasn’t immune to the demand ease, and is better supplied than most of Canada. The seasonally adjusted SNLR was 70.0% in August, down from 70.7% a month before. It’s still a tight market, but almost 15 points below the peak seen earlier this year. On a relative basis, buyers in the market today are seeing the market cool. 

Toronto Real Estate Demand and Price Growth

The sales to new listings ratio (SNLR) compared to the annual rate of benchmark price growth, for composite homes across Greater Toronto.

Source: CREA; Better Dwelling.

Greater Toronto real estate responded to the easing demand with slower annual price growth. Annual growth of the seasonally adjusted composite benchmark was 17.3% in August, down from 18.1% a month before. Monthly gains are about two-thirds what they were last year at this time. Still a very large number, but things are beginning to taper. 

Vancouver Real Estate Is Almost A “Balanced” Market

Greater Vancouver real estate is cooling down faster than the national average, and nearly balanced, apparently. The seasonally adjusted SNLR was 64.9% in August, down from 73.5% the year before. It’s an unusually large jump, but it appears demand cooled much faster than it usually does at this time of year in Greater Vancouver.

Vancouver Real Estate Demand and Price Growth

The sales to new listings ratio (SNLR) compared to the annual rate of benchmark price growth, for composite homes across Greater Vancouver.

Source: CREA; Better Dwelling.

Greater Vancouver real estate prices are slowing in growth as a result of the improved supply balance. Annual growth of the composite benchmark fell to 13.3% in August, down from 14.0% the month before. Not a panic-inducing drop, but price growth is definitely easing as supply improves. 

Canadian real estate supply issues are easing, relative to qualified demand. This is helping to cool home price gains, which is a healthy sign of market exuberance easing. Annual growth is still very large though, so it would be a stretch to conclude people are already acting rationally. If annual price growth doesn’t get close to zero (or negative), it would be the first time buyer exuberance hasn’t eased after such a large drop in relative demand

Like this post? Like us on facebook for the next one in your feed.



We encourage you to have a civil discussion. Note that reads "civil," which means don't act like jerks to each other. Still unclear? No name-calling, racism, or hate speech. Seriously, you're adults – act like it.

Any comments that violates these simple rules, will be removed promptly – along with your full comment history. Oh yeah, you'll also lose further commenting privileges. So if your comments disappear, it's not because the illuminati is screening you because they hate the truth, it's because you violated our simple rules.

  • Ahmed 3 years ago

    I’m still shocked that people have seen prices climb +20% in a year, and think NOW is the perfect time to buy, because that’s going to happen every year. If that happened every year, you’re looking at a currency crisis.

    • Vincenet Fornelli 3 years ago

      In a currency crisis, you want hard assets though. This is the knees bees if you think the loonie is on a reckless path.

      • RW 3 years ago

        People in 1980 want their investment thesis back. They have little else left after that dumb situation.

        In a currency crisis, all of the property gets reevaluated, because the fundamentals of which the currency was based on becoming unreliable. You don’t have a crisis in a strong economy, it’s because everything has an inflated price.

        • Neek 3 years ago

          Over the long run that worked out right? Houses were like 30k in the 80s. If you put 30k under your mattress your screwed. And housing is the least risky compare to other investment over the long term.

          • bubble survival 3 years ago

            Absolutely not. Late 80s, in Toronto was real estate bubble. Mid 90s the same house was 40% off.

    • Rick 3 years ago

      Hindsight 20/20, to some extent. Same could be said in 2015, 2016, 2017, but if you bought a modest townhome at one of those years in GTA or surrounding smaller cities like Kitchener, you’ve made quarter a mil by now.

  • Thomas 3 years ago

    The government’s plan to try to prop up prices is going to work for a bit, but they’ve already shocked young people into distrusting the government. They only thing now is waiting to see if people go to the extreme right or left as a response to the pillaging.

  • Brian 3 years ago

    I think this article is very well written but leaves a room for an unmentioned side of the story.

    Classifying SNLR (for example for M.Van) as an indicator for demand would be showing only one side of the story as the full equation to the ratio involves the supply side well.

    For sure the demand has gone down as the spring season has passed and we are at the mouth of a cold season. This is to be expected and nothing unusual. Also, for sure, SNLR has gone down partially due to this reason.

    But this article leaves out a huge chunk of information about the new listings number. Year over year in August, new listings decreased 26.4%, and month over month, listings decreased by 25.2%. July’s new listings (not Aug) were 12.3% below 10 year avg. This is the unusual side that the article could have mentioned in detail.

    Might be subjective but to me the reason why SNLR decreased is not dominantly bc of decreasing demand but due to limited supply/pull back in supply.

    • GTA Landlord 3 years ago

      The SNLR takes into account that number already. Did you get your license last week? Please stop lecturing people if you don’t even understand the data you’re presenting.

    • Gerald Haw 3 years ago

      I think you might need to review that less on seasonal adjustments at some point. Y/Y comparisons make about as much sense as they did the year after the Great Recession, which is not at all.

      That’s why the government uses an adjustment. I believe CREA used Statistics Canada to do the adjustments as well, so it’s not just Realtors making wild assumptions.

  • Brian 3 years ago

    let me make some corrections

    YoY Aug listings number decrease rate is 30.6%
    MoM decrease rate is 7.9%

    • GTA Landlord 3 years ago

      You’re looking at unadjusted numbers, which are useless when comparing two indirectly comparable numbers. Check the CREA seasonally adjusted data which is comparing period to period.

  • Gerald Haw 3 years ago

    It’s interesting to see how Realtors leaned on seasonally adjusted data on the way up, claiming it was “unreliable” to use anything but, now they want to say it was useless. What a quaint little situation.

  • Trader Jim 3 years ago

    I don’t know whether the market is cool or not, but I know my friends have stopped talking about real estate the second Toronto has reopened again. That’s probably a sign of something, I just don’t know what.

    • David Reiss 3 years ago

      The election has been a breather, for the first time ever. Huge number of listings in Toronto for some reason in September. I guess some people are ready to move on. It would be silly to buy now if you think the gov is going to give you money though.

  • SmugCanadian 3 years ago

    Houses were not $30 k in the 80s. Not in the GTHA anyway. Maybe in the 1960s? I recall looking at homes in ‘81 for $130kish.

Comments are closed.