Canada’s Housing Market: July 2025 Rebound Raises Questions Ahead.

Canada’s Housing Market: July 2025 Rebound Raises Questions Ahead

Overview:
In July 2025, Canada’s housing market witnessed a notable rebound, rekindling both optimism and caution among analysts. The Canadian Real Estate Association (CREA) reported pivotal shifts in sales and prices that suggest a market regaining momentum—but also foreshadow potential price rises in the near future.

Key Takeaways:

1. Home Sales Lifted by 3.8% Month-Over-Month

According to CREA, national home sales rose 3.8% in July compared to June, with a year-over-year gain of 6.6%—a significant uptick underscoring renewed buyer activity. 

2. Prices Holding Steady—but Still Below Peak

The MLS® Home Price Index (HPI) was unchanged from June to July, though it remains 3.4% lower than July 2024. Meanwhile, the national average selling price edged up slightly—by 0.6% annually. 

3. Regional Highlights—Toronto and Calgary Paint Contrasting Pictures

• In the Greater Toronto Area, home sales soared 10.9% year-over-year, reaching roughly 6,100 transactions in July, the busiest month since 2021. Meanwhile, average selling prices dropped 5.5% from the prior year, offering enhanced affordability. Listings and active inventory also surged, providing buyers greater choice. 

• Calgary saw a different trend: home sales fell 11.6% year-over-year, even as new listings surged and inventory ballooned to levels not seen since before the pandemic. Benchmark prices dropped 3.9% compared to July 2024.

What Does This Mean?

1. Buyer Confidence Is Returning—but Slowly
The uptick in national sales suggests growing buyer confidence, potentially tied to improved borrowing conditions and market recalibration. This appears especially true in the GTA, where reduced prices and more listings are drawing buyers.

2. Price Stability Offers Breathing Room
With home prices plateauing, affordability has improved somewhat. Regions like Toronto are offering clearer buying windows, though with caution advised about future price movements, especially as demand strengthens.

3. Regional Variability Signals Caution
While urban markets like Toronto show signs of revival, others like Calgary reflect caution—where expanding inventory has weighed on prices and dampened activity.

Looking Ahead: Will Prices Spike?

CREA warns of possible upward price pressure if demand continues to rally—even amid current supply levels. While the national trend points toward recovery, whether this leads to sustained price hikes or simply stabilizes depends on:

• Interest rates and monetary policy

• Regional market dynamics and inventory levels

• Economic indicators, such as employment and inflation expectations

Final Thoughts

July 2025 marks a notable pivot in Canada's housing market narrative. Sales are resurging, prices have steadied, and regional trends are becoming more distinct. Whether this rebound translates into a full-fledged recovery or a temporary reprieve hinges on broader economic signals in the months ahead.