National home sales rise as long-awaited boost ‘seems to have finally arrived’: CREA

National Home Sales Rise: CREA Signals Long-Awaited Market Boost in Canada (July 2025)

The Canadian Real Estate Association (CREA) reported a significant uptick in national home sales for July 2025, marking a 6.6% increase compared to July 2024, signaling a recovery in Canada’s housing market after months of slowdown. This follows a 3.8% month-over-month rise from June 2025, with transactions up a cumulative 11.2% since March 2025. CREA’s senior economist, Shaun Cathcart, noted, “The long-anticipated post-inflation crisis pickup in housing seems to have finally arrived.” Below is a detailed analysis of the data, regional trends, pricing, supply, and implications, based on available information as of August 15, 2025.

Key Highlights of July 2025 Home Sales

1. Sales Growth:

• National Sales: A total of 45,973 homes were sold in July 2025, up from 43,122 in July 2024, a 6.6% year-over-year increase.
• Month-over-Month: Sales rose 3.8% from June 2025, marking the fourth consecutive monthly increase.
• Cumulative Growth: Transactions have surged 11.2% since March 2025, driven by pent-up demand and easing economic pressures.

1. Regional Trends:

• The Greater Toronto Area (GTA) led the surge, with transactions up a remarkable 35.5% since March 2025, reflecting strong demand in Canada’s largest market.
• Other key markets, such as Calgary and Ottawa, also contributed significantly to the national uptick, as noted in May 2025 data.
• Montreal saw a 9.7% year-over-year sales increase, reaching the highest level since 2021, though markets like Toronto and Vancouver experienced slower growth due to broader market dynamics.

1. Pricing Trends:

• The national average sale price in July 2025 was $672,784, up a modest 0.6% from July 2024, indicating price stabilization.
• The MLS® Home Price Index (HPI) remained unchanged from June to July 2025, following three months of ~1% declines earlier in the year, suggesting a pause in price drops.
• Year-over-Year Comparison: The HPI was down 3.7% from June 2024, but CREA anticipates smaller year-over-year declines in coming months as the market stabilizes.

1. Supply and Inventory:

• New Listings: Up 0.1% month-over-month in July, with 202,500 properties listed nationwide by month’s end, a 10.1% increase from July 2024 and aligning with the long-term average.
• Sales-to-New Listings Ratio: Rose to 50.1% in June 2025 (from 47.3% in May), close to the long-term average of 54.9%, indicating a balanced market (45%–65% range).
• Inventory Levels: 4.7 months of inventory at the end of June 2025, slightly below the long-term average of 5 months, suggesting tightening supply but not yet a seller’s market (below 3.6 months).

Factors Driving the Boost

• Economic Recovery:
• Easing inflation (2.3% in April 2025) and expectations of Bank of Canada interest rate cuts in late 2025 have boosted buyer confidence, reducing mortgage rate pressures.
• Wage growth (3.8%) outpacing inflation supports affordability.
• Pent-Up Demand: Buyers sidelined by early 2025’s economic uncertainty (e.g., U.S. tariff threats) re-entered the market, particularly in the GTA.
• Market Stabilization: After a slow start to 2025, with sales down 3.5% year-over-year in June, the market has rebounded, with May and June showing 3.6% and 2.8% month-over-month gains, respectively.
• Regional Dynamics: Strong GTA performance and resilience in markets like Montreal offset slower growth in high-cost cities like Vancouver.

Critical Analysis

• Positive Signals:
• The 6.6% year-over-year sales growth and 11.2% cumulative increase since March confirm a robust recovery, particularly in the GTA, where transactions surged 35.5%.
• Price stabilization (HPI flat, average price up 0.6%) suggests the market is balancing after earlier declines.
• CREA’s Outlook: The association expects continued growth into September, driven by a typical influx of new listings, but will monitor buyer reactions to this supply.
• Challenges and Risks:
• Tariff Uncertainty: The looming 35% U.S. tariff threat could disrupt economic confidence, potentially slowing the recovery.
• Regional Disparities: While the GTA drives growth, markets like Vancouver and Toronto face slowdowns, with condo oversupply in Toronto noted in June 2025.
• Affordability: Despite price stabilization, the average price of $672,784 remains high, and CREA forecasts a 3.3% rise to $746,379 in 2026, potentially straining affordability.
• Skeptical Perspective: The “long-awaited boost” may be overstated, as sales remain below pre-2024 peaks in some regions, and tariff risks could derail momentum. The GTA’s outsized contribution suggests uneven recovery, with smaller markets lagging.

Practical Implications

• For Buyers:
• The balanced market (sales-to-new listings ratio at 50.1%) offers negotiating power, but rising prices forecast for 2026 suggest acting sooner.
• Monitor mortgage rates, as potential Bank of Canada cuts could lower borrowing costs.
• For Sellers:
• The 10.1% increase in listings aligns with historical norms, but a “burst of new supply” expected in September 2025 could increase competition.
• Work with a REALTOR® to navigate local market conditions, especially in slower regions like Vancouver.
• Stay Informed: Check CREA’s monthly updates (https://creastats.crea.ca) or news outlets like BNN Bloomberg for the next report on September 15, 2025.

Conclusion

The 6.6% year-over-year rise in home sales for July 2025, coupled with a 3.8% month-over-month increase, confirms a strong recovery in Canada’s housing market, led by the GTA’s 35.5% transaction surge since March. With the average sale price at $672,784 (up 0.6%) and inventory at 4.7 months, the market is balanced but tightening. While CREA’s optimism is supported by data, tariff risks and regional disparities warrant caution. For the latest updates, visit https://creastats.crea.ca or follow CREA on social media (@CREA_ACI).