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The Canadian housing market is witnessing a resurgence of sellers, marked by a 5.6% increase in new listings in July compared to the previous month, representing a substantial 24% surge since April. This rebound comes after earlier declines in the year, and experts from RBC note that it is the swiftest rise in new listings outside of the pandemic period. This phenomenon, which is marked by a notable increase in markets like Saguenay, Kitchener-Waterloo, and London, indicates a shift in sentiment. It remains to be seen whether this trend is fueled by investors capitalizing on market timing or homeowners seeking to evade rising mortgage costs, with clarity expected in the coming months.

While new listings surge, home buyers are showing a degree of reticence. In July, national home sales dipped by 0.7% compared to the prior month, marking the first decrease in six months. This cooling is attributed to the Bank of Canada's resumption of interest rate hikes, which has put a damper on the spring rebound in the housing market. Elevated five-year fixed mortgage rates, currently at 5.84%, are prompting potential buyers to hold back, according to Capital Economics, while the average variable rate is nearly 7%. As a result, demand from buyers has waned, with sales falling in certain regions, like the Fraser Valley and Toronto, but rising in more affordable markets such as London, Niagara, and Windsor, along with several provinces including Quebec and the prairie provinces.

The landscape in the housing markets of British Columbia and Ontario is shifting, as the tight supply-demand conditions witnessed in the spring are quickly unraveling, as highlighted by RBC economists. This trend underscores a broader trend in the Canadian real estate market, where shifts in both supply and demand, influenced by factors like interest rates and affordability, are impacting various regions in varying ways.

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