For the first time since March, the share of Greater Toronto Area (GTA) neighbourhoods experiencing overbidding has increased, signalling growing competition for single-family homes. According to a recent analysis from Wahi, 13 per cent of the 284 neighbourhoods with at least five home sales in September were in overbidding territory — up from 8.0 per cent in August.

While 1.0 per cent of GTA neighbourhoods sold homes at-asking, the majority (86 per cent) of neighbourhoods still saw homes sell below asking price.

“With the start of the historically busier fall real estate market, stronger competition is expected,” says Wahi CEO Benjy Katchen. “However, we’re still seeing transaction levels and bidding activity well below last year’s level for this time of year.”

In September 2023, 24 per cent of GTA neighbourhoods were in overbidding territory, and an additional 3.0 per cent of homes sold at asking.

Demand for single-family homes fuels bidding wars

The competition between housing types is diverging, with condominiums and single-family homes moving in opposite directions. Just 5.0 per cent of neighbourhoods with at least five condominium sales saw overbidding in September, down from 8.0 per cent in August and 10 per cent in the same period last year.

For single-family homes, however, 18 per cent of neighbourhoods experienced overbidding, up from 13 per cent in August. Despite this increase, bidding activity remains far below last year’s levels, when 35 per cent of neighbourhoods saw overbidding for single-family homes.

Most homes still selling below asking

The majority of homes sold in September were purchased for less than their asking price, with 69 per cent of all properties selling below asking — down slightly from 70 per cent in August. A year ago, 61 per cent of homes sold for under their listing price.

By housing type, the trend continues to differ. For single-family homes, 64 per cent were purchased below-asking in September, a slight improvement from August. However, for condominiums, 77 per cent of sales were below asking, consistent with August figures.

Top 5 underbidding GTA neighbourhoods

For the first time in 15 months, Oakville’s Eastlake neighbourhood did not rank among the top five underbidding neighbourhoods in the GTA. Three of the top five underbidding neighbourhoods were located in the City of Toronto, with Forest Hill reclaiming the top spot after placing fourth in June.

Luxury markets priced between $2 million and $4 million dominated the list of underbidding neighbourhoods, with Port Credit in Mississauga being the exception.

Top 5 overbidding GTA neighbourhoods

Toronto neighbourhoods accounted for four of the top five overbidding areas, with St. Clair West leading the way in Old Toronto. The Danforth and Parkwoods were among the GTA’s top overbidding areas in August.

The Canada Mortgage and Housing Corporation (CMHC) recently reported that Ottawa’s “population-adjusted construction is at its lowest level in nearly 10 years.” A City of Ottawa progress report shows that Ottawa is only at 22 per cent of its annual housing target at the end of August.  

The Ottawa Real Estate Board (OREB) reported a healthy increase in home sales for September, with 1,047 units — a rise of 11.4 per cent from the same time in 2023. However, sales remain below historical averages, coming in 17.4 per cent below the five-year average and 15.4 per cent below the 10-year average for September.

Year-to-date, home sales reached 10,485 units, representing a 6.4 per cent increase compared to September 2023.

Healthy fall outlook with chronic supply issue — ‘not building enough of the right homes to address the ‘missing middle’’

“As we navigate a shifting housing market, Ottawa’s fall outlook is healthy,” says OREB president Curtis Fillier. “Activity is robust with an uptick in sales and prices remaining steady. Meanwhile, both buyers and sellers are rethinking their purchasing power amid news about additional interest rate cuts on the horizon, longer amortizations and increased price caps for insured mortgages.”

Fillier goes on to explain that recent policy developments to stimulate demand have been encouraging, though the Ottawa market doesn’t typically experience issues with demand. Rather, “We have chronic supply issues,” he notes. “We’re not building enough homes in the city, and we’re not building enough of the right homes to address the ‘missing middle.’”  

Price trends

The overall MLS Home Price Index (HPI) composite benchmark price for September was $642,800, a slight increase of 0.2 per cent from September 2023.

Single-family homes saw a benchmark price of $729,000, up 0.5 per cent year-over-year, townhouses/row units experienced a 1.7 per cent decline with a benchmark price of $500,000 and apartments had a benchmark price of $414,200, down 1.3 per cent year-over-year.

Inventory and new listings

September’s new listings totalled 2,343 units, a 3.9 per cent increase from the year prior. This was 4.7 per cent above the five-year average and 11.6 per cent higher than the 10-year average.

Active listings rose to 3,529 units, marking a 16.9 per cent year-over-year increase and sitting 43.3 per cent above the five-year average. Months of inventory rose slightly to 3.4 months, up from 3.2 months in September 2023, indicating a slightly more balanced market.

Review the full report here.

Saskatchewan recorded 1,398 home sales in September, marking an 8.0 per cent increase from last year and 15 per cent above the 10-year average, the Saskatchewan Realtors Association (SRA) reports. This is the 15th consecutive month of above-average sales in the province, with some of the strongest figures ever reported for September.

“Record population growth, favourable economic conditions and an improving labour market continue to support strong demand in Saskatchewan’s housing market,” says SRA CEO, Chris Guérette. “When paired with easing lending rates, these factors are, without question, contributing to a fifteenth consecutive month of above-average sales.”

Sales & inventory highlights

Detached homes accounted for 73 per cent of the sales growth, with regions across the province seeing improvements and year-to-date sales on track to be the second-highest on record.

New listings dropped 2.0 per cent year-over-year, falling 16 per cent below long-term trends. This, combined with strong sales, led to a 17 per cent inventory decline, pushing levels to their lowest since 2007.

Price highlights

The provincial benchmark price in September was $343,800, down slightly from August but up nearly 6.0 per cent from last year.

Moose Jaw led the province’s price gains with a 13 per cent increase, while Saskatoon reported a record benchmark price of $401,800, up 7.0 per cent year-over-year.

Regina highlights

Regina reported 320 sales last month — the second-highest level on record and a 5.0 per cent year-over-year and 19 per cent long-term trend increase.

The city’s new listings were down, creating a 23 per cent inventory dip year-over-year. Its benchmark price was $320,700 in September, nearly five per cent above the year prior. 

Saskatoon highlights

Saskatoon reported 432 sales last month — a 16 per cent year-over-year and 24 per cent long-term trend increase.

The city’s supply is still limited and prevented strong sales, with September’s inventory levels at over 46 per cent below the 10-year average and the lowest reported for the month since 2007.

Review the full report, including by province, city, CMA/CA, economic region and census division.

Billions of dollars spent on renovations and infill development during the pandemic have boosted the overall value of residential housing and supported higher prices for single-family homes in Toronto and Vancouver, despite broader market pressures, according to the 2024 Re/Max Canada Changing Landscapes Report.

National spending on home renovations up 8% to nearly $300 billion — Toronto and Vancouver lead the way

The report highlights how ongoing revitalization efforts in these cities have significantly impacted housing supply and affordability, especially in urban cores. From 2019 to 2023, national spending on home renovations — including additions, upgrades and equipment — reached nearly $300 billion, an 8.0 per cent increase from the previous five years. Toronto and Vancouver were at the forefront of this trend.

Contrastingly, throughout the same time, residential building permits for single-family homes in the Toronto and Vancouver Census Metropolitan Areas (CMAs) totaled just over $27 billion — a near-24 per cent decline from the previous five years and a trend that’s expected to continue.

However, the value of permits for multi-family housing rose by 60 per cent from 2014-2018.

“With all available tracts of land in the city committed to high-density construction, the single-detached home is quickly becoming a unicorn,” says Re/Max Canada president Christopher Alexander.

“Existing homeowners who can’t find what they want in the market will buy an older home in an area of their choice and renovate or build their vision. We expect this trend will strengthen in the years to come and serve to drive price growth in single-detached housing even further. There are a variety of variables at play, but renovation and revitalization is having significant implications for housing supply and affordability.”

Revitalization & gentrification

Revitalization is still one of the most underestimated elements impacting rising housing values.

Renovation and infill development have transformed neighborhoods, particularly in areas where land values have far outpaced the value of existing homes. Older bungalows and two-storey homes are being replaced by custom-built houses, changing the face of working-class areas into desirable hotspots.

The report also highlights gentrification, particularly in Vancouver, where single-detached homes are growing larger, while condominium units are shrinking. Despite the overall decline in single-family home numbers, new construction has led to bigger houses in the Vancouver CMA, with the average home size reaching 3,600 square feet — the largest among major Canadian cities.

In Toronto, the number of vacant land properties dropped significantly (by 6,680) between 2019 and 2021, reducing opportunities for new single-family developments. As much as 30 per cent of the Greater Toronto Area (GTA)’s housing stock was built before 1960, making renovation a key strategy for updating older homes.

Stable prices: Those who can make their moves now vs later may be better off

Renovation activity, combined with rising affluence and intergenerational wealth transfers, continues to impact the housing market. The average price of a detached home in the GTA has increased by almost 35 per cent between 2019 and 2023, rising from $1.05 million to $1.42 million. In Vancouver, detached home prices have climbed nearly 38 per cent over the same period, from $1.42 million to $1.96 million.

However, Alexander points out that prices are currently stable compared to 2023: “Those in a position to make their moves now may be better positioned than those in 2025, as prices currently remain close to year-ago levels in the Toronto CMA and modestly higher in the Vancouver CMA.”

As Canada’s major cities continue to evolve, Re/Max expects that renovation and infill development will play an even larger role in shaping the housing market in the years to come. 

“The detached housing supply in urban centres is in the midst of a monumental metamorphosis that will unquestionably impact housing inventory and composition for further generations of real estate consumers,” notes Alexander.

Review the full report here.

Following the Bank of Canada’s third consecutive cut to the overnight lending rate this year, reducing it by another 25 basis points in September to 4.25 per cent, Canada’s housing market should see an increase in activity this fall and continue into next year.

For consumers, the drop is a positive sign that we’ve moved past the peak of high lending rates, and with further rate cuts expected, many sidelined buyers will feel confident enough to re-enter the market amid more favourable borrowing conditions. But is it enough to make a material difference in the budgets of first-time buyers?

Several hurdles besides borrowing costs: Saving for down payment, passing stress test & finding the right property

High interest rates are just one of several financial hurdles that first-time buyers have to overcome. In addition to the high cost of borrowing, saving for a down payment — which is difficult to do when rental rates are high — plus passing the stress test to qualify for a mortgage and finding an appropriately-sized property in a desirable region within their price range pose a significant challenge. More supply — most importantly, the right type of supply — is needed to help young families achieve their goal of homeownership.  

While there are government initiatives targeted at helping people save and making lending practices more favourable for the next generation of buyers, such as allowing Canadian lenders to offer 30-year amortizations for insured mortgages of new construction homes, more needs to be done to incentivize development and make the construction of new homes easier, faster and more affordable for builders.

This is especially true in the country’s most expensive and densely-populated markets, where high construction and borrowing costs remain a major barrier for developers. Without further intervention from the government, new construction will continue to decline in the coming years. 

Increase in inventory required to make homeownership attainable

While home prices have remained stable in most markets this year and declining interest rates are making owning a home a bit more accessible to some buyers who have been waiting in the wings, we cannot afford to take the spotlight off the bigger issue: there are still too few homes for our growing population.

We’re approaching the intersection of declining interest rates and home price appreciation. If activity picks up in the months ahead, we’ll reach a point where the increased affordability offered by lower borrowing costs is outweighed by price gains due to increased competition.

According to a 2023 report by the Canada Mortgage and Housing Corporation (CMHC), Canada needs to build approximately 3.5 million additional housing units by 2030 in order to restore affordability. However, experts have refuted this figure, citing that with continued population growth, hundreds of thousands more homes will be required.

For first-time buyers, a difficult choice looms: whether to transact now or hold off until further rate reductions are announced.

As sidelined buyers gradually return to the market, an increase in demand could trigger a sudden uptick in competition, resulting in home price appreciation. Cautious buyers are likely to enter the market sooner than later — while competition is low and inventory is building — while those with a higher risk tolerance will opt to continue to wait for further rate decreases. The fact remains that young Canadians should not be forced to “time the market.”

Young Canadians prioritizing homeownership

Despite higher home prices and borrowing costs having been prohibitive to young Canadians looking to enter the market in recent years, there’s still a strong desire to own a home.

A recent Royal LePage survey found that 84 per cent of Canadians belonging to the adult Generation Z and young Millennial cohort — those aged 18 to 38 or born between 1986 and 2006 — believe that homeownership is a worthwhile investment, and they are committed to achieving this goal. For many, this means making significant lifestyle adjustments, whether it be cutting back on expenses or postponing major life milestones. 

Our country’s ongoing and worsening housing supply shortage needs to be addressed immediately

Young Canadians are not only cutting back on discretionary spending (travel and entertainment, for example) but also making financial decisions that could impact their long-term stability, such as delaying education or saving for retirement, as well as other significant investments.

If there was any doubt, this should serve as further proof to policymakers and regulators that our country’s ongoing and worsening housing supply shortage needs to be addressed immediately. While the dire need for more housing inventory grows ever more crucial, the financial stability and future opportunities of young Canadians are being impacted.

It’s quite clear that young Canadians are eager to transition from renting to owning their own home, securing their place on the property ladder as their parents did. While reduced interest rates can help make homeownership more attainable for first-time buyers, this is not the only solution to the larger, more complex challenges within Canada’s real estate economy. 

Last month, Saskatchewan reported 1,507 residential property sales, the Saskatchewan Realtors Association (SRA) reports.

This was a 7.0 per cent year-over-year decline but over 12 per cent above long-term averages, with August marking the 14th consecutive month of above-average sales. This is unlike other Canadian markets, SRA’s CEO, Chris Guérette, points out.

Relative affordability and strong employment continues to support provincial housing demand

The sales-to-new-listings ratio decreased from levels over the last few months, thanks to few new listings compared to sales.

This prevented an even greater monthly decline in inventory. That said, inventory levels still decreased by 17 per cent year-over-year and are 40 per cent below long-term averages.

“Saskatchewan’s relative affordability, when paired with employment gains and falling unemployment rates, continues to support strong housing demand in our province,” notes Guérette.

‘Very significant’ price growth in Saskatoon and Moose Jaw

Less supply, especially in the lower price ranges, are pushing prices upward: last month the province reported a residential benchmark price of $344,700, a 6.0 per cent year-over-year jump.

“Inventory levels remain over 40 per cent below average province-wide and in our two largest centres — and we’re seeing the impact that can have on prices,” says Guérette.

She notes that almost all regions of the province saw year-over-year price growth in August. This was as high as 11 per cent in Moose Jaw and 9.0 per cent in Saskatoon — something she describes as “very significant.”

Regina

Regina reported 387 sales last month, 8.0 per cent above year-over-year and 29 per cent above long-term trends. Year-to-date sales consist of 2,765 units, 15 per cent higher than last year despite ongoing inventory issues — levels declined by 22 per cent year-over-year and remain over 40 per cent below long-term trends. The city’s benchmark price was $319,700 in August, 3.0 per cent above the year prior.

Saskatoon

Saskatoon reported 457 sales last month, 13 per cent below year-over-year and 14 per cent above long-term trends. Inventory remains over 48 per cent below long-term trends, and Saskatoon still reports the province’s tightest market conditions. Its benchmark price was $404,900 in August, over 8.0 per cent above the year prior.

Review the full report, including by province, city, CMA/CA, economic region and census division.

Last month, Calgary’s market continued to move from the strong seller’s market conditions of the spring, the Calgary Real Estate Board (CREB) reports. More inventory and fewer sales brought months of supply to more than two months, a level unseen since 2022.

“As expected, rising new home construction and gains in new listings are starting to support a better-supplied housing market,” says Ann-Marie Lurie, chief economist at CREB. “This trend is expected to continue throughout the remainder of the year, but it’s important to note that supply levels remain low, especially for lower-priced properties. It will take time for supply levels to return to those that support more balanced conditions.”

More inventory driven by higher-priced properties; fewer sales thanks to lower-priced properties

Last month’s inventory reached 4,487 units, 37.3 per cent higher than the year prior but almost 25 per cent lower than long-term trends for August.

Higher-priced properties mostly drove these gains, with more new listings and less sales, at 2,186 — 19.5 per cent less than 2023’s record high yet 17 per cent higher than long-term averages for August. Sales declines were for homes priced below $600,000.

August’s unadjusted residential benchmark price was $601,800, 6.3 per cent higher than last year and slightly lower than last month. The average benchmark price rose by 9.0 per cent year-to-date.

Detached homes

Compared to a year ago, detached home sales fell by 14 per cent. August saw 2,011 detached homes in inventory, with over 85 per cent priced above $600,000, helping push the months of supply up to nearly two months.

August’s unadjusted detached benchmark price was $762,600, just under last month but over 9.0 per cent higher than last year.

Semi-detached homes

For semi-detached properties, the region saw 297 new listings and 172 sales, with a sales-to-new-listings ratio drop to 58 per cent that supported increased inventory and a months of supply jump to nearly two months.

This category’s August unadjusted benchmark price was $681,200, a drop from July but almost 10 per cent higher than last year.

Row homes

Last month, new listings for row homes priced above $400,000 added to year-to-date growth of about 16 per cent, while slower sales over the past quarter also boosted inventory gains. There were 660 row home units available, a 75 per cent increase over particularly low levels reported last year.

This category’s unadjusted benchmark price in August was $461,700, slightly lower than last month but over 12 per cent higher than the year prior.

Apartment condominium homes

August’s new listings of apartment condominium homes reached 1,001, a record high for the month. This was paired with declining sales, which caused the sales-to-new-listings ratio to fall to 60 per cent and inventories to rise to 1,476 units, with months of supply to rise to about two and a half months.

The month’s unadjusted benchmark price was $346,500, similar to July’s and almost 16 per cent higher than 2023’s prices.

Review CREB’s full reports for the city and region.

As the long-awaited decline in interest rates begins to take shape, early insights from Re/Max brokers and agents nationwide suggest the fall’s housing market activity will be steady. According to Re/Max’s 2024 Fall Housing Market Outlook, average sale prices for all housing types are expected to increase between one and six per cent in most regions by the end of the year.

With the next Bank of Canada (BoC) interest rate announcement scheduled for September 4, many Canadians are watching closely. A recent Re/Max survey reveals that 16 per cent of Canadians would feel more comfortable entering the real estate market if the BoC implements a rate cut of more than 100 basis points by the end of the year.

“The fall market is usually a good early indicator for activity as we look ahead to early 2025, and we’re headed toward more healthy territory. With interest rates starting to ease, buyers are beginning to come off the sidelines,” says Christopher Alexander, president, Re/Max Canada. 

However, Alexander notes that while the market is showing signs of life, it won’t necessarily return to historical activity levels without a more substantial move from the Bank of Canada.

Consumer confidence on the rise with remaining challenges

As anticipation builds around further potential interest rate cuts, first-time homebuyer confidence is notably increasing. The survey found that 25 per cent of Canadians are actively saving for a home and believe they will soon be able to purchase, with the most optimism seen among younger Millennials and Gen Zs aged 18-24 (35 per cent).

On the other hand, some current homeowners may find that the rate cuts come too late. 14 per cent of homeowners facing mortgage renewal at higher rates are considering selling their homes due to affordability challenges.

Financial priorities for many Canadians remain focused on day-to-day expenses, such as utilities and food (58 per cent), and travel (45 per cent), with home purchases ranking among the top three priorities for 25 per cent of respondents. Meanwhile, affordability concerns are prompting 28 per cent of Canadians to consider relocating to another country, and 25 per cent are reconsidering starting a family.

Affordability and supply remain key concerns

“Despite some consumer confidence starting to return to the market this season, the reality is Canadians are still grappling with some serious housing affordability challenges rooted in lack of supply. Yes, borrowing is becoming less expensive, but this won’t make housing affordable in the long run,” says Alexander.

As more buyers re-enter the market and available inventory is absorbed, Alexander warns of potential upward pressure on prices. He stresses the need for a comprehensive national housing strategy developed collaboratively by all levels of government to address supply shortages strategically.

“In the meantime, buyers would be wise to work with an experienced real estate agent to help navigate those cyclical market ups and downs that often accompany this push and pull of supply and demand.”

Review the full report, including regional insights.

Recently, the Home Construction Regulatory Authority (HCRA) revoked Mariman Homes’ license to build and sell homes in Ontario. This is the strictest action the authority can take against a licensed builder.

What happened

Due to complaints from purchasers, the HCRA suspended the Hamilton builder’s license last December. An inspection showed it had entered into agreements of purchase and sale for 108 homes without proper authorization and enrollment in Tarion’s warranty program (a requirement to legally build and sell homes in Ontario).

Also, the HCRA discovered that Mariman had allowed its creditors to seek improper price increases from purchasers and failed to hold the deposits it received in trust (as was required under the company’s purchase agreements).

To minimize the impact on purchasers, the HCRA gave Mariman the chance to enroll the homes and prove it could complete construction within the timeframe and price it had committed to. This was done to find a solution that would still allow purchasers to obtain their homes.

Unmet commitments result in revoked license and fines of $400,000

When Mariman was unable to satisfy its commitments, the HCRA revoked its license and ordered it to pay $400,000 in administrative penalties. In the end, the company sold over 100 homes it was not authorized to sell.

“Given these infractions, including a history of financial mismanagement, the HCRA has revoked Mariman’s license to build and sell new homes,” says Wendy Moir, chief executive officer and registrar of the HCRA. “This builder’s past and present conduct raises serious doubts about its ability to operate their business lawfully and with honesty and integrity.”

A ‘textbook example of why builders and sellers must go through the licensing and enrollment process’

Moir stresses, “This is a textbook example of why builders and sellers must go through the licensing and enrollment process. These standards are designed to ensure builders have the competency and financial capability to operate a business before they collect money from purchasers.”

Mariman is currently undergoing receivership proceedings in the Ontario Superior Court of Justice. Tarion is monitoring the situation for any impact on deposit protection coverage for purchasers.

Results from the Canadian Home Builders’ Association (CHBA) 2024 Q2 Housing Market Index (HMI) showed even worse builder sentiment than the previous quarter across key Canadian regions.

CHBA reports that new home sales figures indicate housing starts activity won’t materially pick up in the near future. What’s particularly concerning is the record HMI lows in Ontario (11.6/100 for single and multi-family dwellings) and British Columbia (17.8/100 for single-family and 32.5/100 for multi-family dwellings) combined with the large affordability challenges and need for more supply these provinces face.

The association also points out that the slowdown’s full effects are yet to be felt in housing starts because of long building timelines, especially for multi-family structures.

Over 60% of builders expect half the housing starts this year as were in 2023

Nationally, 48 per cent of HMI respondents stated they’re building fewer units than they otherwise would have as a result of challenges with mortgage qualifications for their customers, while 22 per cent stated that lack of sales has led to the cancellation of projects. 61 per cent of respondents expect an average of half the number of housing starts this year compared to 2023.

“The slowly dropping interest rate environment is not enough to counter the restrictive mortgage rules contributing to buyers’ inability to enter the market with today’s house prices. Canada continues to need both more supply and changes to mortgage rules to help drive the construction of that supply,” says CHBA CEO Kevin Lee.

‘Much more policy change is needed to turn the tides and get housing supply momentum underway’

Lee continues: “If buyers can’t get better access to mortgages, and municipalities don’t lower development taxes and address the barriers to home building, the chronic undersupply of homes will only get worse in many areas of the country, which will drive up house prices again. Much more policy change is needed to turn the tides and get housing supply momentum underway.”

‘Every level of government must tackle this problem from every angle’ — what’s still needed?

As of August 1, first-time buyers of new construction homes can access 30-year amortizations on insured mortgages, which Lee describes as an “important action to help the next generation of well-qualified individuals into the market.” He explains that more relief on the mortgage front is still needed though, through means like expanding 30-year amortizations on all insured mortgages for new construction.

“We also need revisions to the mortgage stress test to make it dynamic and lower it at higher rates. Every level of government must tackle this problem from every angle, in concert,” he stresses.

Get more information on CHBA’s HMI, including detailed methodology and key takeaways.