Canada Sees Improved Trend In Existing Home Sales For July Continuing Through Next Year, Even if "Barriers Remain"

10:17 AM EDT, 08/15/2025 (MT Newswires) -- Rishi Sondhi over at TD Economics has said, after reading Existing Home Sales data for July 2025, that "pent-up demand temporarily sidelined earlier in the year returned to markets with some force last month", supported by "ample choice" in Toronto and Vancouver. Indeed, Sondhi added, it looks as though the sales recovery that should have happened earlier in the year after significant rate relief in 2024 was simply delayed some months.

Sondhi said: "This improving trend will likely maintain itself through next year. Some reduction in economic uncertainty should bring back more buyers in B.C. and Ontario, while further Bank of Canada rate relief could offer modest stimulus in the back half of the year. However, barriers remain, such as stretched affordability in several provinces and a weaker job market."

Sondhi noted Canadian existing home sales advanced for a fourth consecutive month in July, rising 3.8% month-on-month. Gains in Ontario (+7.7% m/m), B.C. (+3.9% m/m) and Alberta (+2.6% m/m) helped lift national sales. Meanwhile, monthly declines were recorded in Quebec, Manitoba, and parts of Atlantic region.

New listings, Sondhi noted. were flat in July. With sales rising and new listings flatlining, the sales-to-new listings ratio tightened a couple percentage points to 52%. This pushed markets further into balanced territory. Average home prices advanced 1.3% m/m in July, lifted by gains in Ontario, B.C. (both up 1.1% m/m) and Quebec (+ 0.7% m/m). Prices dropped in every other province during the month.

Sondhi also noted the MLS home price index, a more "like for like" measure was unchanged. Prices for detached units were up 0.2% m/m, while condo prices fell 0.3% m/m. Sondhi said this much softer performance in the home price index than the average home price measure indicates that the composition of sales is lifting prices (i.e., more expensive housing sold relatively well last month, lifting average prices).

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