Canadian Existing Home Sales (May 2025)
Rishi Sondhi, Economist | 416-983-8806
Date Published: June 16, 2025
- Category:
- Canada
- Data Commentary
- Real Estate
Canadian home sales post a small gain in May
- Canadian existing home sales increased 3.6% month-on-month (m/m) in May, building on April's modest 0.8% m/m gain. Gains in Ontario (+10% m/m) and Alberta (+4% m/m) helped lift national sales. Meanwhile, sales dipped in B.C. and Quebec (both down 0.5% m/m).
- New listings increased 3.1% m/m 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.
- Average home prices advanced 1.9% m/m in May. Prices were up notably in B.C. (+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% m/m in Ontario, were flat in Quebec and dipped in Alberta.
- The MLS home price index, a more "like for like" measure, declined 0.2% m/m, and is down 3.5% on a year-on-year basis. Prices for detached units were down 0.2% m/m, while condo prices fell 0.4% m/m. Notably, a much weaker performance in the home price index than the average home price measure suggests the presence of compositional forces on prices (i.e., more expensive housing sold relatively well last month, lifting average prices).
Key Implications
- 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. However, the economic backdrop remains uncertain, and we'd 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 the second quarter.
- Even if we see these gains moving forward (which is our 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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