Do we have a “stand-off” between buyers and sellers in the Canadian real estate market with neither side willing to compromise – the Royal Bank of Canada (RBC) certainly thinks so.
The latest housing data released by the Canadian Real Estate Association (CREA) has prompted the RBC to speculate that neither buyer nor seller is prepared to give way on what constitutes market value.
Buyers and sellers are “in a showdown”, says the RBC analysis.
Canada’s composite MLS Home Price Index has edged 0.7% lower in the past four months, and is now down 3.7% from a year ago. The national average home price is $682,219. The number of deals was 0.6% lower in November than in October.
The RBC says: “Whether buyers’ measured approach is tactical or out of caution amid economic uncertainty, the implication is the same: strong-arming sellers into reducing prices in many markets.
“We expect diverging price trajectories to be sustained in the coming months.”
When releasing its industry data, the CREA aligned with this analysis, saying the month-over-month fall in prices indicated Canadians were offering discounts to get their sales over the line.
The latest data also found that new listings were down 4% for the past three months. Compared with the October number, November listings were off -1.6%.
Many Realtors feel the listing result alone shows Canadians were ready to put 2025 behind them and enter the market afresh after the holidays.
Nationally, the market softness appears concentrated in Ontario and British Columbia, though prices dipped in Alberta, too.
Outside these centres, markets are seeing values and sales volumes edge higher due to a tighter supply.
The CREA data for November registered drops in sales volumes for Toronto (-0.6%), Ottawa (-6.7%), Montreal (-2.8%), Halifax (-12.8%), Victoria (-6.6%) and Winnipeg (-2.1%).
The plus side was populated by Vancouver (4.6%), Edmonton (3.6%), Calgary (0.3%), Regina (6%) and Saskatoon (6.2%).
The RBC summed up its analysis, saying: “We expect past rate reductions and price drops in certain markets to draw more buyers from the sidelines in the year ahead, unlocking some pent-up demand accumulated during the period of elevated borrowing costs.”