Turning the page?

After six months, Parliament resumes today. Expect big, fast change says the guy in charge.

The latest Nuk Nanos poll shows a wee burst of optimism in the wake of the federal vote. “In the period following the election of the Carney federal government, consumer confidence has been improving,” he reports. “Views on the future strength of the Canadian economy remain net negative but positive views have doubled in the past four weeks. Positive views on personal finances and the value of real estate are also up.”

But up enough to save the housing market?

Not so fast. At least according to the current stats. Folks may feel better than they did in late winter, but lately they’re seeing car plants idled, TD Bank announce big layoffs and Trump dithering again on tariffs. Job stress is up. So is the Canadian household savings rate – because spending is down.

Veteran real estate broker Bob Ede says, more than anything, this is the reason why…

So it’s almost the end of May – traditionally the hot end of the Spring market which sets the tone for the rest of the year. Lately we’ve given you the latest stats form a number of key markets across Canada, and it’s mostly the same story. Sales down. Inventory up. Prices eroding glacially. Only in the seriously-pooched condo market (especially with assignment listings of pre-con buyers) do we see reasonable rivulets of blood.

Look at the benchmark GTA/416 region – home to the largest real estate board in North America, plus the greatest concentration of real estate agents on the planet (now diminishing). The last five Springs tell a tale of post-Covid change that few realtors could ever have expected. At the same time, collapsing sales have shocked potential buyers and political leaders because the laws of supply and demand have been negated. At least in the 6ix.

In the first pandemic recovery market (2021) FOMO ruled the land, prices surged, sales soared, bidding wars raged on and houses sold in days, or hours. In the GTA just under 12,000 deals took place (double the previous May) and the average detached fetched $1,716,272.

The following May reality was setting in as inflation and interest rates took off. Sales fell almost 40% to 7,300. Despite that, prices continued to surge – with that same home now commanding $1,914,890.

May of 2023 brought more sales – just over 9,000 – and despite higher mortgage rates prices did not budge. The average single-family home in this market was still selling for an average of $1,913,132.

That started to slip last year when offers fall back to only 7,000 and the sale price of that property dipped to $1,826,370. And now, in 2025 – with Donald Trump in the White House, a weird election result in Canada and serious worries about our nation’s path forward – it’s a realtor nightmare. Sales last month were a scant 5,600 and that average detached price fell to $1,700,710.

In a few days we’ll get the latest. “Uncertainty is being bolstered daily,” says Ede. “Inventory is growing each week. Prices are flat from last month – best case will be up 1% and worst case down 2%.”

Realtor and data nerd Scott Ingram reports listings of freehold properties in 416 are now above 4,000. Condos have topped 8,000. In terms of months-of-inventory, condos have doubled to 7.4 (that’s huge) while freeholds sit just below four.

Here’s a snap of current inventory in a historic context…

Source: Robert Ede

So, what next?

Looks like the Bank of Canada will be treading cautiously now that core inflation is heating up again. Likely no change in rates next week. Besides, US budget concerns have been pushing on yields, so our CB doesn’t want to get offside and whack the loonie (which has been doing okay lately).

So, mortgage rates hold. Supply will continue to overwhelm demand. And now we’re heading into the slower summer market in a year when a million families have to refinance their low-rate Covid mortgages and tens of thousands of pre-con buyers have to close on condos they can’t rent, can’t Airbnb and don’t wish to live in.

During all of this the price of a detached home in our largest city has declined by only 11% in the past four years. Over this time incomes have increased significantly – up 5.8% in 2024 alone. So real estate affordability has improved (relatively) at the same time mortgage rates (five-year) have declined by almost a full 2% (now 4.2%). Today there is vastly more inventory for buyers to choose from. Bidding wars are restricted to unique properties. Sellers are more willing to dicker. Blind auctions, bully bids and offer dates are rare. Lenders are pliant and flush.

Logic – not reason – tells us the missing ingredient to a potential rebound comes down to one thing. Confidence. Will it return? Or is this a false post-election flutter?

So many unknowns. But if a pandemic, raging inflation, historic hike in rates, recession fears and a global trade war, plus the threat of annexation and political upheaval, didn’t bring a real estate collapse, can there be one now?

About the picture: “This is Ola, our 13 week old Flat-coated Retriever from the Annapolis Valley,” writes Brandon. “She’s been a great distraction from the BS as of late. Thanks for your commitment to this blog, it’s been a daily dose of rational thought for many years now. I originally discovered you at work, where some of the “old guys” had a tab bookmarked on the computer. I sold my Vancouver condo last year and bought a house in Ottawa (well within the rule of 90) for a job upgrade. Best decision. You’ve always preached to go where the opportunities are and I’m glad I did. The “Sunshine Tax” is real. Don’t let the comment section get you down. Thanks!”

To be in touch or send a picture of your beast, email to ‘garth@garth.ca’.

Source: https://www.greaterfool.ca/2025/05/26/turning-the-page/