Canada's Home Sales Post A Small Gain in May, Says TD

11:49 AM EDT, 06/16/2025 (MT Newswires) -- Canadian existing home sales increased 3.6% month-on-month in May, building on April's modest 0.8% month-over-month gain, said TD after Monday's data from the Canadian Real Estate Association (CREA).

Gains in Ontario (+10% month over month) and Alberta (+4% month over month) helped lift national sales. Meanwhile, sales dipped in British Columbia and Quebec (both down 0.5% month over month).

New listings increased 3.1% month over month in May. With sales rising slightly faster than new listings, the sales-to-new-listings ratio tightened slightly. However, at 47%, the sales-to-new listings ratio remained below its long-term average, suggesting that loose conditions prevail in markets, noted the bank.

Average home prices advanced 1.9% month over month in May. Prices were up notably in British Columbia (+2% m/m), across Saskatchewan and Manitoba (average gain of 1.7%), and the Atlantic (average gain of 1.8% m/m across provinces).

Meanwhile, prices were up 1% month over month in Ontario, were flat in Quebec and dipped in Alberta.

The MLS home price index, a more "like for like" measure, declined 0.2% month over month, and is down 3.5% on a year-on-year basis. Prices for detached units were down 0.2% month over month, while condo prices fell 0.4% month over month. Notably, a much weaker performance in the home price index than the average home price measure suggests the presence of compositional forces on prices -- in other words, more expensive housing sold relatively well last month, lifting average prices.

May's sales gain -- alongside the modest upward revision to April -- suggests that pent-up demand built up earlier in the year is beginning to creep back into the market, added TD. However, the economic backdrop remains uncertain and the bank would need to see more gains before confidently declaring that buyer sentiment is out of the doldrums.

It's also worth noting that earlier weakness still suggests that home sales are on track to decline in Q2, recalled the bank.

Even if TD sees these gains moving forward -- which is its current view -- exceedingly loose conditions in B.C. and Ontario should help to restrain price growth in these markets, and by extension, Canada overall.

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