Canada’s housing market posted a strong recovery in May, with seasonally adjusted MLS sales rising 5.5 per cent month-over-month to 37,900 units, marking the strongest monthly gain since October 2024. Despite the rebound, sales remained 0.6 per cent below year-ago levels and well below the pre-pandemic average of approximately 43,000 units per month, underscoring that the market continues to recover from a prolonged period of weakness.
Supply conditions eased slightly but remained elevated. New listings declined 1.0 per cent month-over-month, while inventory tightened to 4.8 months from 5.1 months in April. Although inventory remains elevated relative to recent years, it sits within the longer-term seasonal range of roughly 4.5 to 6.5 months. The national sales-to-new-listings ratio held at 49.2 per cent, consistent with balanced market conditions overall. However, Toronto and Vancouver remained in buyer’s market territory, while Quebec and several other major centres remained balanced.
Regional dynamics remained uneven. Ontario led the monthly rebound with an 8.8 per cent gain in sales, followed by British Columbia at 5.8 per cent, with both markets showing early signs of stabilization after sustained weakness following the 2022 rate shock. Nova Scotia posted a notable 20.4 per cent monthly gain from a low base, while Calgary saw sales decline 2.5 per cent. Saskatchewan and Manitoba remained among the tightest provincial markets, with 3.2 and 2.2 months of inventory, respectively. Toronto recorded its third consecutive monthly increase in average sale prices, while Quebec City continued to post outsized gains in both sales and prices, underpinned by comparatively tight market conditions.
Home values improved modestly. The national average sale price rose 0.7 per cent to $680,900, up 1.5 per cent from a year earlier. Meanwhile, the quality-adjusted benchmark price was essentially unchanged from April and has now declined on a year-over-year basis for 16 consecutive months, down 3.9 per cent. This suggests compositional effects — changes in the mix of homes being sold — continue to support headline price figures. Price growth is expected to strengthen gradually as excess inventory is absorbed.
The outlook remains cautiously constructive. While the housing market is showing signs of stabilization, macroeconomic uncertainty is expected to keep the recovery gradual. Upside risks to inflation from elevated oil prices and uncertainty surrounding the upcoming Canada-United States-Mexico Agreement (CUSMA) joint review are likely to keep monetary policy on hold through year-end. Modest gains in resale activity are anticipated through the remainder of 2026, with affordability improvements expected to provide incremental support to markets in British Columbia and Ontario.
MLS Housing Summary
Source: CREA
MLS Supply Conditions
Source: CREA
MLS Housing Market Summary, Select Metro Areas
Source: CREA
Independent Opinion
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