Canadian Real Estate Association (CREA) reports a significant shift in the housing market, marking the first 'meaningful' gain in home sales for 2026. This positive development comes after a slow start to the year, with May witnessing the strongest month-over-month increase in sales. However, it's important to note that actual sales activity remains 5.1% below levels reported from May 2025.
The CREA's senior economist, Shaun Cathcart, highlights the disproportionate impact of Ontario on the national sales increase. He suggests that the HST rebate on new builds may have temporarily diverted buyers' attention from the existing home market. Despite this, home prices continued to stabilize in May, with the national benchmark price declining by a mere 0.1% month-over-month, and a 3.9% decline annually.
The market conditions are tightening, with new listings decreasing by 1% month-over-month and the sales-to-new-listings ratio climbing to 49.2%. This ratio, according to CREA, is becoming more balanced, falling between 45% and 65%. The association attributes this to a more aligned alignment between buyers and sellers in price expectations.
BMO Capital Markets' senior economist, Robert Kavcic, interprets May's data as a potential sign of an emerging real estate recovery. He suggests that the combination of pent-up demand and a gradual reduction in seller prices should bring volumes back into the market. However, Kavcic also points out that the condo segment in Ontario continues to be a weak spot, with benchmark prices declining by 8.3% year-over-year in May.
This article raises questions about the sustainability of the housing market recovery and the potential impact of regional variations on the overall market dynamics. It also highlights the importance of monitoring the condo market in Ontario, which could be a critical factor in the overall health of the real estate sector.
