Canadian real estate prices have been resilient in recent years, but a fundamental indicator is flashing warning signs. Canadian Real Estate Association (CREA) data shows the sales-to-new listings ratio (SNLR) fell in June, indicating the weakest demand balance for the month since 1995. The indicator hasn’t eroded from peak to trough this quickly since the late 80s, during the years directly preceding the 1990s real estate price crash, the largest in Canada’s history.
Sales-To-New Listings Ratio
The sales-to-new listings ratio (SNLR) is a simple but powerful metric the industry uses to gauge demand balance. It’s a leading indicator of market conditions and price pressure.
The SNLR is fairly straightforward to read, with a few helpful guidelines to interpret the ratio:
- > 60%: Excess demand creating pressure for prices to rise. This is also known as a seller’s market.
- 40-60%: A balanced market where the volume of buyers and sellers are in harmony, and prices are just right. We like to call this a Goldilocks’ market.
- < 40% : Excess supply creating pressure on prices to drop. This is known as a buyer’s market.
Remember, these are only guidelines and there are some important caveats to keep in mind— the most important being the velocity of change. As with most finance indicators, where a market is matters less than where it’s heading. A balanced market may still see aggressive price increases if demand suddenly rises faster than supply, and vice versa.
Canadian Real Estate June Demand Balance Was The Weakest Since 1995
The CREA sales-to-new-listings ratio (SNLR) for properties on the MLS in June.
Source: CREA; Better Dwelling.
Canadian real estate’s demand balance just saw the weakest June in well over a generation. The national SNLR fell to 49.3% in June, down 2.2 points from last year. The erosion was driven by new listings (+8%) advancing at more than double the rate of sales (+3.5%). Last month was the weakest SNLR for June since 1995, which was during the country’s largest real estate downturn ever.
Despite a relatively small correction following 26 years of generally rising prices, market conditions now resemble historical warnings. It was the fourth consecutive June to see the SNLR drop, marking an unprecedented 23.8 point drop from peak to trough. The drop reflects supply advancing 32% faster than demanded, a move that hasn’t been exceeded since the 41% drop between 1988 and 1990, which led to the largest real estate price correction in history. That period marked the last significant national housing downturn and bubble correction in Canada.
Does this indicate Canada’s real estate bubble is about to crash or the correction is over? Drop your thoughts in the comments below.
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This is what happened in the 80s and they *increased immigration* and it had no effect. Qualified demand has been exhausted, as it was pulled forward with low rates and stimulus. Now they can try to maintain no sales for a generation, or prices crash and the market restores balance.
The interesting part will be where the market shifts. The last time this happened Montréal was Toronto, and the shift in the 90s was because Toronto was more affordable.
Back down to historical 3 times earnings or even below, who knows. Certainly not these professional real estate forecasters. The panic is just beginning.
100% agree, we need affordable houses in relation to current average wages.
PRICES needs to COME DOWN at least 25 to 30% more in order for the house Prices to be in the Normal yearly 4% Price Increase Range today counting from 2019.
– For eg. If the house Price in 2019 was $500,000 + 4% inflation Increase for 5 years = $ 608,000 would be Normal Price today.
– but the $500k house in 2019. today is between $800-900k.
** BUBBLE NEEDED TO BE BURST IN ORDER FOR THE PRICES TO BE IN THE AFFORDABLE RANGE**
**** GOVERNMENT is RESPONSIBLE for this mess. They need to fix it at their own Expense ****
The government’s expense is our expense. The government needs to resign en mass and be replaced with people who aren’t Progressive ideological idiots and/or globalist communist sociopaths.
SNLR does not directly equate to price changes. The only way prices decline is if homeowners, en masse, decide to sell their homes for less than they paid. Real estate in 2025 is fundamentally different from real estate in the 1990s – now, homes are an extremely stable long-hold asset class and not just the place where your bed goes. A tempering of prices could happen as a result of increased days on market, but an outlier month isn’t going to crash the market.
Not applicable for investors or developers who must pay back their loans.
Many condo markets across BC will experience as huge a crash that Port Coquitlam, Coquitlam and Port Moody did in the 1990s. We were buying condos for 75 – 125K all over then.
A Major difference has been successive Liberal governments trying to drive up prices to prop up a Ponzi style economy where a ridiculous amount of GDP is tied up in non-productive assets and drive speculation. The CBC has constantly published stories from real estate associations trying to establish FOMO (fear of missing out) to drive prices constantly higher. The government’s capital gains tax grab told you everything you needed to know about their terrible economic approach. Bring in massive numbers of Immigrants driving housing.prices through the roof and then increase taxes on this new found artificial value and I crease your revenue streams. I personally found it elitist and despicable.
Real estate is not different to the 90s its a commodity and always will be. It goes up it goes down. People will sell well below purchase price if necessary. Does not matter if you paid 500000. If your Neighbour is selling for 400000 thats the price you will have to accept. Its happening in condo sales frequently. Some condos might not have any value at all if insurance rates and maintenance fees keep rising. Its happening in Florida in particular but some other cities in the US also have this type of Condo problem.
I TOLD YOU WE SOLVED CANADA’S HOUSING PROBLEM..
From April 2023 to March 2024, Canadians purchased approximately 7,100 U.S. residential properties, a total value of about $5.9 billion USD. This makes Canadians the largest group of foreign buyers by total number of transactions.