As purchasing power declines and demand falls, approximately 70% of Canadian housing markets are now considered balanced. According to the Canadian Real Estate Association’s (CREA) November housing market analysis, markets continued to cool last month, with both sales and new listings falling across the country. Indeed, with the exception of 2019, November 2022 saw the fewest new listings in 17 years.
CREA discovered that 69 of 101 local markets are now considered balanced, with supply and demand roughly equal. There are 21 buyers’ markets and only 11 sellers’ markets. These findings are in stark contrast to earlier this year, when markets across Canada were firmly in sellers’ territory, with stiff competition and rapidly rising prices.
The CREA data provided to STOREYS specified which local markets fell into each of the three categories. Balanced markets, the most common market type, extended from Cape Breton to Yellowknife and included some of the country’s most notable housing markets, such as Calgary, Montreal, and Hamilton-Burlington.
Interestingly, Calgary, Regina, and Saskatoon, which are all balanced, “stand out as markets where home prices are barely off their peaks at all,” according to CREA.
When it comes to markets that have shifted in favor of buyers, the list includes some of the most expensive areas in the country, such as the Greater Toronto Area (GTA), Greater Vancouver, Vancouver Island, Victoria, and Mississauga. A buyer’s market occurs when purchasers are in a better position than sellers due to the number of homes on the market exceeding the number of buyers.
According to CREA, Niagara Falls-Fort Erie is the furthest into buyer territory, followed by Brantford, the GTA, Chilliwack, and St. Catharines. Kitchener-Waterloo has narrowly entered a buyer’s market, with Cambridge and Vancouver Island also on the verge.
According to CREA data, only 11 markets remain in favour of sellers, all of which appear to be in some of the country’s more remote and less desirable areas, such as Timmins and Medicine Hat. Northern New Brunswick and Central Alberta are the most far into buyer’s market territory.
Both CREA Chair Jill Oudil and Senior Economist Shaun Cathcart say that buyers and sellers should not expect a significant change in the market in the coming months. However, things may start to change in the spring.
“It will be interesting to see what buyers do when listings start to come out in big numbers in the spring, and even more interesting to see what happens a little later when the Bank of Canada starts to eventually cut rates,” Cathcart said. The Bank of Canada is now widely believed to be at or very near the top of its tightening cycle. “All the other fundamental elements still exist for the market to take off again.”
Although the market may pick up, it will not reach the frenzy seen in 2021 and early 2022. “It may also be the first spring market in a number of years where buyers have a chance of not being out-competed for properties that catch their eye,” says Oudil.
