Home prices typically fall to stimulate demand, but that’s not the case in Canada, apparently. Canadian Real Estate Association (CREA) data shows the price of a typical home climbed in March. Despite this upward tick, it was the weakest sales for the month since 2009. A real head scratcher, considering inventory remains historically robust.
Canadian Real Estate Prices See Third Consecutive Monthly Gain
Canadian home prices: composite benchmark price.
Source: CREA; Better Dwelling.
Canadian home prices jumped significantly last month. The price of a typical home advanced 0.5% (+$3.1k) to $664.4k in March, marking a third consecutive monthly increase. After the consistent monthly growth, prices remain just 4.7% (-$32.5k) lower than last year, though still 21.0% (-$176.9k) below the record high reached exactly four years prior.
Canadian Home Sales Hit Weakest March Since 2009
Canadian real estate sales: March.
Source: CREA; Better Dwelling.
High prices were definitely not driven by demand, as sales slipped 2.3% lower than last year to 38,709 units in March. That makes last month’s sales the weakest for the month since 2009, a 17-year low. While the drop wasn’t substantial, last year had already been historically weak. As noted last year, the population was much smaller back in 2009—about one-seventh smaller, providing roughly the same demand.
Canadian Real Estate Listings Drop, But Overall Supply Remains High
On the inventory front, the market showed little sign of improvement in terms of new listings. CREA reported 84,345 new listings in March, down 4.9% from last year—more than twice the rate of sales. However, last year saw unusually lofty inventory levels, leaving the demand balance relatively unchanged. The sales-to-new-listings ratio (SNLR) climbed just 1.2 percentage points to 45.9%. While that’s generally considered on the bottom half of balanced, it’s unusually low for the time of year. Last year’s SNLR was the weakest since 2009 for March, and this is only slightly better.
The inventory picture is a little more complicated these days than just the SNLR. It’s worth noting that new listings were down from last year, but 2025 was an unusually high volume for Canada in March. The pressure is amplified by stagnant inventory already on the market, with near-record volumes of built and unsold new construction inventory providing even more supply. Add to that a shrinking population in some key markets, and there are considerable hurdles to jump before any market normalization.
Anyone still trust CREA data? They’re pulling a StatsCan with composite change. I don’t know a single realtor who says things are getting better, just junk data showing manipulation.
The CREA was stating until last month there would be a 8.5% increase in prices for 2026? The revised that down to 2.5% in April. Thne sad part is they predicted that pretty much every major market outside of the 401 corridor aznd lower Mainland of BC would see price declines, but those markets would see increases?
Now, not sure if there was any actual analysis to support that, but it seems very odd that they predict a decline in AB, with AB being the only province in 2025 to gain people, GDP and employment?
So clearly the CREA, and the feds are using some sort of voodoo economics here. The GTA and Vancouver have now become ‘consumer and govt consumption’ economies with negative GDP growth outside of consumer and govt consumption. In effect, they no longer produce anything of value, and rely completely on other provinces to produce export goods to fund their economies through banking, cartels and govt.
In contrast, AB, and the prairies have seen steady growth, despite almost no net new private investment since 2016, averaging 3% per year. They have the highest real GDP per capita in Canada, despite a massive influx of new residents who are unskilled and not really adding anything to the economy.
This is further supported by the fact that ON runs a major trade deficit with the USA, with BC having a slight surplus while AB/SK produce 3 times the exports per capita of other provinces. So in effect, the Liberals have used their position to tax the wealth from AB and waste it in ON, BC and the rest of eastern Canada.
So you are absolutely right, the CREA, even SC and their projections are mainly based on crystal slippers and fairy dust.
However this is just part of a national propaganda campaign which now clearly identifies Canada as not a free market economy, but a corporatocracy effectively run by govt sponsored cartels.
Willing to be this is related to a rising flood (far off and formerly affordable cities showing price increases, not real demand in major ones.
Given that by sales price volumes, Vancouver and the GTA are more than 50% of Canada’s housing market, probably not. For example, an average house in edmonton, regina or Halifax are 470k, 341k, 594k, are all well below the national average of 665k. Even if we take Calgary, Montreal, Winnipeg and Quebec city, at $671k, $632, 406k, 445k, only Calgary is at or slightly above the national average.
If we take the 4 most expensive markets in Canada, Ottawa, GTA, Vancouver and Victoria we have a metro population for these places of 10, 900,000, and an average house price of 1,036,000. For the other major cities in Canada, the combined population is roughly the same, 10.9M, but the average house price is $504k. Only one of those metro areas has a higher mean price than the national average, with Calgary at 671K.
So, what this means is that 25% of Canada’s population paid roughly double what the other 25% of urban residents do for shelter. In terms of volume of real estate by value, the expensive cities are double what the next group are in terms of aggregate real estate value. This is why the results are skewed higher solely because 4 metros have ridiculous prices.
The other issue, which explains the actions of Carney, Ford and Eby, is that the amount of leverage and credit extended in those 4 metros is substantially more than in the others. Of the 2.7Tr in mortgages, about 50% will be in those 4 metro areas, even though they are about 25% of the population. Since there is no good reason for prices to be that high in these metro areas, which are characterized by high unemployment, low investment outside of housing, and poor real GDP per capita.
So w2hat we have is a structural distortion related to the geopolitics of Canada, and the massive influence banks and other large cartels who rely on consumer spending for revenue on our govt and institutions. The problem is, if these markets saw a 1990 style correction today, it would not only endanger those cities, but Canada’s entire financial system. The CHMC, which was categorically misused by both Trudeau and Carney to subsidize builders, speculators and banks, is so overweight in those regions that it could see Canada’s federal debt triple with a large wave of defaults in these 4 metros.
Arent we lucky we had self described ‘ geniuses’ running this country since 2015? How much more hopeless could it have been made if someone said, hey don’t use the CHMC, a crown corp with little or no assets, as a subsidy tool for speculators, developers, and so on? The unfunded Liabilities of the CHMC are more than $1Tr today, and if we see a 90s style correction, that would be payable to our record breaking banks?
So why, again, are we subsidizing new builds with GST holidays and expanded CHMC eligibility? We know how this turns out, just look up Freddie Mac 2009. And the USA, to their credit, prioritized assisting consumers, not banks ….. a complete 180 from where Trudeau and Carney sit.
Well let’s not get too excited – keep in mind that the benchmark HPI is a number made up by realtors, and realtors know that rising prices (“the bottom is in!”) cause rising sales (“buy now or be priced out forever!”) which most importantly causes more commissions for realtors! Is there perhaps a little incentive to make this HPI number rise during the most important selling season of the year?
Realtors opinions might be easy to get, but they are typically of zero financial value. This constant yammering about supply issues is ignoring the obvious fact that at 1 – 1.3M for a mean house in GTA/GVR where pre tax family incomes are about $90K, means that a reasonable mortgage is less than $30K/y. This would mean the most they could afford to finance is $500K. Even worse, real GDP per capita in both of these markets has declined substantially since 2014, with the GTA at 65k and GVR at 48K. So clearly, any sort of analysis would see this as an arbitrage, where standard of living, incomes are declining, but housing prices are at least double what is supported by market incomes. This is why everyone who can is leaving those metros, going where the COL and incomes are better.
The even bigger problem is that as the economy shifts away from the industrialize central Canada to the west, and with Carney’s dismal handling of Trump and Nafta, its going to get a lot worse for the GTA.
Look, having worked on Bay St., forecasts are rarely measured after the fact to determine how accurate they were. The CREA is an association of Realtors. They have tried to make themselves out to be financial advisors, but its doubtful that one in a thousand actually understands the dynamics of microeconomics, ie. elasticity of demand, price distortions and forecasting.
For example, you can use a financial model to tell you whatever you want to hear. Why, well you put in what you want, fill up the data, and make whatever conclusions you want from it. So these are a waste of time. If you understand how markets for housing function in Canada, you will know that any price growth other than through population and income growth is artificial.
Population growth, is an undersized component, since they are generally in the rental market for at least a few years. So the main constraint on housing prices is real GDP per capita. If you cant afford your mortgage without constantly borrowing against the house or general credit, our system should chew you up and spit you out as quasi homeless bankrupt. That is how Canada’s antiquated banking system works.
However, what ew have seen is the Harper experiment in 2009 was that if you keep lending them more and more, they dont default, housing prices rise, and they can use their house as an ATM. Now none of this is new, its exactly what happened globally in 2009. The problem is the message that Canada is somehow immune to this happening is a Big Big problem. Canada’s banks are no ‘stronger’ or more solvent than US banks or european banks, in fact they typically have much lower reserves than their competitors do, meaning they are inherently more risky. The main difference is that the Govt of Canada has consistently chosen the banks over the consumer.
This is why Cartney, ford, Eby have no problem ‘investing’ huge sums to effectively kick the can down the street on housing prices, and not let it correct. It will still correct, but if it had corrected in 2024, we would already be 1/4 of the way back to a real economy. Instead they just added pressure to the eventual catastrophe. TGhis is why Carney, Ford have been so interested in getting majorities, because it could blow up any time.
This data only supports the simple fact that shelter and credit have very high levels of inelasticity of demand. What this means, simply, is that housing prices are dictated by supply side forces, not demand side. Now this is a well known fact, even cited by Adam Smith in the 18th century, who originally described the concept of market driven economics.
So the fact that we have a massive excess in supply, particularly in new homes/condos, concentrated in contracting markets (population, income, employment and GDP) shows that prices have little or no relation to market forces.
In fact, it demonstrates that in 2026, Canada’s real estate market pricing is entirely driven by Bank lending policies, an absolute lack of regulation or oversight from Ottawa, and that govt subsidies to builders, banks and construction since 2023 have actually maintain ridiculous prices for housing, contrary to what they said when they announced the subsidies.
To understand the market dynamics better, if the supply side has no real pressure to sell until they get ‘their price’ for the property, then prices wont go down. Even though there is no demand for housing at these prices, they are able to sell some to people on the margin who buy for no price related reasons, like relocation, need for different housing options, immigration or marriage/kids.
So, just as raising rates can slow credit growth by forcing people into bankruptcy, and therefore extinguishing demand, and contracting the money supply, that requires that private banks actually contract the money supply. The actual moves by our banks have been not to do that, since that endangers profits, and potentially causes a major credit collapse.
So to summarize, micro economics of demand explains perfectly what is happening in Canada. Since demand for credit and housing are almost completely inelastic, the only way prices will decline is if the supply side is forced to sell at much much lower prices, in effect what is happening on the demand side since many many people are either behind on payments, or close to it. Eventually as more and more people default, there will be no new sales at these prices.
The question is why the government chose to ‘help’ builders and banks, but hurt everyone else, and lie about it? It is incomprehensible that Carney doesnt understand the impact his actions are having on consumers facing both inflation and shelter costs that are deeply and unjustly inflated. Therefore this was a choice by the govt to not only do that for the benefit of those who neither deserve nor contribute anything to Canada’s economy through these subsidies, and then lie about it?
to A Matsig , correct on all points , please include the CREA BS that feeds the FOMO buyer that listens to the hype , the info is all a self serving lie , supported by the budget draining deficits of the bailouts , The BOC no longer has a market for their bonds , and the Canadian Dollar is persona non grata in foreign markets , it has now become a slippery slope regardless of the sunshine data.