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Canada Housing Market: What’s Going On?

Canada Housing Market: What’s Going On?

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Canada's housing market has experienced unprecedented highs and intriguing shifts in the wake of the COVID-19 pandemic. These trends, spurred by unique factors such as rock-bottom interest rates and a surprising reluctance among homeowners to list their properties, have led to a complex supply-demand imbalance that shapes today's real estate dynamics.

At Top Move, we delve deep into these phenomena, using expert analysis, market data, and trend exploration to provide valuable insights into the Canadian housing market. Whether you're a real estate professional, a homeowner, or simply a curious observer of economic trends, this comprehensive examination offers a detailed and engaging look at a critical aspect of Canada's economic landscape.

Table of Contents:

Canada’s Current State of Housing: Toronto, Montreal, Vancouver, & Calgary

According to a special housing report by RBC, here’s what the current landscape looks like in the four major Canadian cities.


The hot spring market cooled off in June, with home sales dropping by 6.9% compared to May, even though there were more homes for sale. House prices, however, continue to climb—reaching $1.16 million on average. This means it's still a tough market for buyers, especially with the possibility of interest rates increasing further.

Related: Everything You Need To Know When Moving to Toronto


The city's housing market is picking up pace, with home sales rising by 11% in June compared to May. New listings have also grown significantly. But despite these signs of recovery, house prices are steady, and sales are still 15% lower than before the pandemic. For buyers, this means the market remains relatively soft, but it's starting to strengthen.

Related: Moving from Montreal to Toronto | Everything You Need to Know


There are more houses listed for sale, bringing the supply in line with the demand. However, house prices nudged up a little in June and might face resistance from buyers going forward, especially if interest rates keep rising. This points to an upcoming challenging period for potential homebuyers in Vancouver.


When it comes to life in Calgary, there's been a big surge in homes for sale in the last couple of months, leading to a 9% rise in sales in June. However, demand is outstripping supply, which keeps pushing prices up—by 4.4% compared to last year. This is good news for sellers and may pose challenges for buyers, especially if this trend continues into the latter part of the year.

Related: An Extensive Guide Moving to Calgary in 2023

The Aftermath of COVID-19 on Canada's Housing Market

The COVID-19 pandemic had a dramatic effect on the housing market, causing interest rates to drop significantly as the economy struggled with business closures, emergency health measures, and supply chain disruptions.

The "Churn" Trend During 2020/21, Explaining the High Market Activity

In the midst of the pandemic, a unique trend emerged in Canada's housing market, with a significant amount of "churn" or movement. Shaun Cathcart, CREA’s senior economist, pointed out that the biggest group of buyers during this period were existing homeowners who were active both in buying new properties and listing their old ones. This activity kept the market alive and bustling even amidst the economic challenges.

As we navigate 2023, the churn trend has taken a different turn. Existing homeowners, who were once the lifeblood of the market, have become more cautious and less active. Cathcart attributes this change to the relatively more attractive mortgage rates these homeowners are currently locked into, as compared to what they might get if they decided to move. This hesitancy has left new listings at historically low levels and has caused a significant shift in the dynamics of Canada's housing market.

The Supply-Demand Imbalance: An Inventory Crisis

Canada's housing market is currently grappling with a serious lack of new listings. This deficiency is not a product of diminished demand but appears to stem from existing homeowners' reluctance to list their properties for sale, largely due to favourable fixed mortgage rates obtained during the pandemic.

The impact of this reluctance is clearly reflected in the numbers. Despite a 6.8% increase in newly listed properties in May, sales rose by a similar level. Consequently, there was little to no change in the sales-to-new listings ratio, which came in at 67.9%, a slight drop from 69% recorded in April. This number remains significantly above the long-term average of 55.1%, indicating that supply is not keeping pace with demand.

Source: National Statistics from the Canadian Real Estate Association

This supply-demand imbalance has exerted significant upward pressure on home prices. According to Cathcart, the limited supply of listings has caused bidding wars among buyers, driving prices up. In just two months, the MLS home price index rose by 2% each month – nearly reaching the growth levels seen at the height of the COVID-19 pandemic.

What to Expect in 2023 and Beyond

Cathcart warns that if the inventory crisis continues, 2023 might witness another round of significant price increases. The lack of available properties is making the housing market recovery appear stronger than it is, with much of the rebound playing out on the price side. As a result, without an influx of new listings, we could be heading towards an even more heated housing market.

Interest Rates and the Unwillingness to Sell

Interest rates are a key determinant of housing market trends, influencing both buyer demand and seller supply. In the current Canadian housing market scenario, low-interest rates have played a significant role in keeping the supply of new listings at bay.

How Fixed-Rate Mortgages from COVID-19 are Influencing Selling Decisions

Many homeowners obtained fixed-rate mortgages during the COVID-19 pandemic when interest rates were at rock-bottom. With these low rates locked in until 2025 or 2026, homeowners are disinclined to sell and thereby disrupt these favourable arrangements. They would have to enter new, likely higher-rate mortgages, which is a deterrent in the present market climate.

What Happens If Interest Rates Move: The Outlook

If rates remain relatively low, current homeowners may continue to hold onto their properties, further exacerbating the supply-demand imbalance. However, if interest rates rise, it could cause a shift in the market dynamic, potentially encouraging more homeowners to sell.

The uncertainty around future interest rates adds another layer of complexity to predicting the direction of the Canadian housing market in 2023 and beyond.

The New Wave of Buyers: A Shift in Market Dynamics

In the rapidly evolving landscape of Canada's housing market, a new set of players is becoming increasingly significant: first-time buyers. While the market used to be primarily driven by existing homeowners selling and buying (a phenomenon known as "churn"), this dynamic has been shifting.

The persistent low supply of new listings, primarily due to the low turnover from existing homeowners, has set the stage for first-time buyers to play a more prominent role.

How increased rental costs are pushing more people towards homeownership

One factor that's bringing more first-time buyers into the market is the surge in rental costs. In many areas, monthly rental prices have become comparable to, or even exceeded, mortgage payments.

For instance, some first-time buyers are now facing the choice between a $4,000-a-month mortgage payment or a $3,600 rent, making the prospect of homeownership increasingly attractive despite the high prices.

While this might seem like an unexpected consequence of the market conditions, it's a clear indicator of the shifts in market dynamics and the potential opportunities for those ready to make the leap to homeownership.

What does this market shift mean for the housing market?

If these fresh-faced buyers continue to roll in while homes remain scarce, it's like adding more fuel to a bonfire - prices could keep climbing higher and higher.

On top of that, as more first-time buyers move from renting to owning, we're seeing a bit of a facelift in the home ownership demographic. Imagine this: instead of a musical chairs-style "churn" of the same old faces selling and buying, we've got a new crowd settling in for the long haul. Why? Well, high mortgage rates might make them think twice before hopping back into the buying frenzy.

The Impact of Market Trends on Stakeholders

  • For sellers, it's like having a hot ticket item on the day of a big sale. With few homes up for grabs and lots of eager buyers, sellers could fetch top dollar for their homes. But wait! What's the catch? Well, if they're looking to buy another home in this market, they might find themselves in the same boat as everyone else - locked in a fierce bidding war.
  • Buyers, especially first-timers, are stuck between a rock and a hard place. Imagine going to an auction where there's only one item up for bid, and you've got plenty of competition. Stressful, right? That's what it's like for buyers in the current market.
  • And renters? As if rent wasn't already burning a hole in their pockets, many are now finding their rent inching closer to a mortgage payment, pushing them to consider buying a home. It's like deciding between paying for a fancy dinner out every night or putting that money towards your own kitchen.

Policy Implications for Government and Regulatory Bodies

For the government and regulatory bodies, it's like walking a tightrope. On one hand, they need to manage an overheated market without causing a sudden crash. On the other, they need to ensure housing affordability without killing the motivation of sellers to list their properties. It's a delicate balance that needs the precision of a circus performer walking the high wire.

Real Estate Professionals: Navigating the Maze

For real estate professionals, the current market is like navigating a labyrinth - full of twists and turns. With fewer properties to sell and a swarm of buyers, their role has shifted. They need to be not just salespeople, but also advisors, helping buyers make sense of the market and guiding sellers to capitalise on their high-demand properties.

It's not just about closing deals anymore; it's about providing value and winning trust in a tumultuous market.

Navigating these market conditions might feel like a high-stakes board game, but with the right strategies and understanding, all players can find a way to succeed.

Predictions for Canada's Housing Market in 2023 & 2024

According to the latest quarterly forecast from the Canadian Real Estate Association (CREA), a dip in Canada's housing market is on the horizon. Sales in 2023 are predicted to drop by 1.1% from 2022 levels, with home prices expected to go down by about 4.8%. This downturn comes after a steady period without any major drops, and it's largely due to the impact of rising interest rates. However, potential buyers who've been sitting on the sidelines may reenter the market as mortgage rates and prices level out.

Things are expected to turn around in 2024. The forecast suggests a robust 13.9% increase in home sales and a 4.7% recovery in prices. But these predictions could shift, given the deepening housing supply crisis — with new home listings hitting a 20-year low. Also, a worse-than-expected recession in 2023 could trigger more profound changes in the housing landscape. Keep an eye out, as these predictions could evolve based on economic developments.

What does this mean for moving trends?

It's interesting to see how the Canadian housing market is shaping up. In fact, according to the Canadian Real Estate Association, home sales have increased by 15% in Alberta and a whopping 20% in British Columbia this past year. And why not? There's never been a better time for a change of scenery. It's forecasted that home prices could drop by about 2% by the end of the year, thanks to an economic recovery.

In the middle of all this excitement, people are going to need a hand with their moves. That's where Top Move comes in, ready to make your move as easy as pie. Picture a platform filled with reliable moving companies, each one ready to help you start your new chapter without a hitch. In the ever-changing landscape of the housing market, Top Move is the steady hand guiding you through your big move.

Wrapping Up: The Canadian Housing Market in 2023

Navigating through the intricacies of Canada's housing market in 2023, we've witnessed several key developments that have reshaped the landscape. These transformative changes, evolving from the aftermath of the COVID-19 pandemic, have set the stage for a unique set of market dynamics.

Here's a recap of the main highlights:

  • A distinct shift from the "churn" effect of 2020/21 towards a market led by first-time buyers
  • An acute supply-demand imbalance leading to an inventory crisis, resulting in skyrocketing home prices
  • Low-interest rates from the past impacting homeowners' decisions to sell their properties in the present market conditions

As we gaze into the future, the questions that linger include how the market will adjust to these ongoing trends, the implications of potential policy changes, and the future norms of homeownership. In the end, the complex and challenging Canadian housing market of 2023 will undoubtedly continue to be a fascinating area to observe and understand.

If you’re buying a home or moving into a new one, use Top Move to find the best moving partners for your travel needs.


Will the housing market go up in 2023 Canada?

The average home price across the nation is predicted to inch up by 3% from 2023 to 2024, reaching approximately $723,250 according to the CREA. This figure is just shy of the price level seen in the second quarter of 2023. In essence, the forecast suggests that prices will largely hold steady until we see a drop in interest rates.

Is Canada in a housing bubble?

According to Bloomberg Economics, Canada held the dubious honour of having the second biggest housing bubble among OECD countries in 2019 and 2021. However, a significant change began in February 2022 when the Bank of Canada started to increase interest rates. This led to a swift drop in housing prices, with detached homes in the Greater Toronto Area experiencing a reduction of $40,000 by September 2022.

Can I sell a house below or above market value?

Yes, it's entirely possible to sell your house for a price above or below its market value. The market value of a house is determined by factors like its size, condition, location, and the demand in the market. Selling a house above the market value may take longer and can be more challenging as it may be perceived as overpriced by potential buyers. On the contrary, selling below market value can accelerate the selling process but might also cause financial loss. In both scenarios, it's advisable to consult with a real estate professional to make an informed decision.

Can my parents sell their house below market value?

Yes, your parents can sell their house below market value, so you can move in to live in it. This is often done as a form of "gift of equity", and there can be significant tax implications for both the buyer and the seller. It is crucial to consult with a tax professional or attorney to understand potential tax obligations.

Can I buy a house for less than market value?

It's possible to buy a house for less than its market value, especially if the seller is motivated to sell quickly, such as in a distress sale or a foreclosure. Additionally, some sellers might accept a lower price in a "sale by owner" scenario to avoid realtor commissions. However, it's essential to get a home inspection and appraisal to avoid unexpected issues that might be the reason for the reduced price.

Can I take or pull my house off the market?

Absolutely. As a seller, you have the right to take your house off the market at any time, unless you've entered into a contract with a buyer. If you've signed an agreement with a real estate agent, you might have to wait until the agreement expires or negotiate an early termination. It's essential to communicate clearly with your agent about your intentions.

Can the housing market crash (again)?

The housing market, like any financial market, is subject to fluctuations, including downturns. Various factors such as economic recession, high unemployment rates, or a sudden oversupply of homes could potentially lead to a market crash. It's beneficial to stay informed about economic indicators and seek advice from real estate professionals when making buying or selling decisions.

How can I afford a house in this market?

Affording a house in a competitive market can be challenging. However, there are several strategies you can employ. Consider getting pre-approved for a mortgage, which can give you a clear idea of your budget and make you more appealing to sellers. You could also consider less competitive neighbourhoods or fixer-uppers that might be priced lower. Don't forget to explore first-time home buyer programs and grants that could provide financial assistance.

Can I rent my house below market value?

Yes, you can choose to rent your house for less than the typical market rate. This might be a strategy to attract more potential tenants, to rent to a friend or family member, or to ensure occupancy in a competitive rental market. However, be aware that this could potentially reduce your income from the property. It's advisable to consult with a property management company or a real estate advisor to understand the potential impacts.

Do you need to move your house?

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