Canada’s housing market is experiencing a significant shift as the number of new listings rises across major cities, changing the supply-demand dynamic that has defined the market for years.
In some regions, more inventory is giving buyers greater choice, while in others, new supply is barely keeping up with demand.
The question now is whether rising listings will help solve Canada’s housing affordability crisis or if deeper structural issues will continue to keep homeownership out of reach for many.
The Numbers: Inventory on the Rise
Across the country, new listings increased by 12% year-over-year in December 2024, giving buyers more options and reducing the urgency to make quick offers. The Greater Toronto Area (GTA) saw a 16.4% increase in new listings, while Vancouver and Calgary recorded 14% and 15% increases, respectively.
Despite the rise in listings, housing affordability remains a major issue. The average home price in Canada now stands at $695,000, up 4.2% year-over-year. While increased supply has slowed the pace of price growth, home values remain high, particularly in cities like Toronto ($1.13 million), Vancouver ($1.23 million), and Calgary ($540,000).
Why Are Listings Increasing?
Several factors are contributing to the increase in housing supply. In many cities, more sellers are entering the market after delaying their plans during periods of higher interest rates. With the Bank of Canada easing rates in late 2024, some homeowners who were previously hesitant to sell are now listing their properties, expecting stronger buyer interest.
New home construction is also playing a role. Many developments that began in 2022 and 2023 are now reaching completion, adding to the supply of condos and townhouses in urban centers. Cities like Toronto, Vancouver, and Montreal have seen a surge in newly completed condo units, giving buyers more choices and putting downward pressure on condo prices.
Economic uncertainty is another factor pushing listings higher. Some investors are choosing to sell properties rather than hold onto them, particularly in markets where rent increases have not kept pace with rising costs. Homeowners facing financial difficulties due to inflation and higher borrowing costs are also opting to downsize, adding more inventory to the market.
How Buyers Are Responding
For buyers, the increase in listings has provided more negotiating power. In cities like Toronto and Vancouver, where bidding wars were once the norm, buyers now have more room to negotiate and take their time before making a purchase. Many are waiting for further interest rate cuts in 2025, hoping for more affordability before committing to a mortgage.
However, the affordability gap remains a challenge. While listings are increasing, home prices have not dropped significantly enough to make homeownership more accessible for many Canadians. First-time buyers, in particular, are still struggling to qualify for mortgages, with many opting to continue renting despite rising rental prices.
Sarah and Josh, a couple in their early 30s living in Vancouver, had been saving for a home for three years. With more listings available, they began looking at condos in late 2024. While they found more options than in previous years, prices remained higher than they expected. They eventually purchased a two-bedroom condo in Burnaby for $810,000, taking advantage of a seller willing to negotiate closing costs. Their experience reflects a broader trend where buyers are finding more options but still facing affordability challenges.
How Sellers Are Adjusting to the Market
For sellers, rising listings mean increased competition. Homes that would have attracted multiple offers in early 2024 are now staying on the market longer, forcing sellers to price competitively and make concessions to close deals.
Sellers in high-demand areas like Downtown Toronto, North Vancouver, and Calgary’s inner city are still seeing strong interest, but those in suburban or less competitive markets are finding it harder to attract buyers. Some sellers are choosing to rent their properties instead of selling, especially in the condo market, where rental demand remains strong.
Will More Listings Solve Canada’s Housing Crisis?
While rising listings are helping ease some pressure, they are not enough to fully address Canada’s housing supply crisis. The country still faces a significant housing shortage, particularly for affordable homes and rental units. Many of the newly completed properties are condos in high-cost urban areas, rather than the detached homes or affordable housing options that many buyers need.
Government policies aimed at increasing housing supply have been slow to take effect. Zoning restrictions, construction delays, and high material costs continue to limit how quickly new housing can be built. Despite the increase in listings, Canada still needs an estimated 3.5 million additional homes by 2030 to keep up with population growth and demand.
The rental market also remains tight, with vacancy rates in major cities still below 2%. Many would-be homebuyers are remaining in the rental market longer, further straining supply and keeping rents high. This trend has created an ongoing cycle where renters struggle to save for down payments while dealing with rising living costs.
What to Expect in 2025
The impact of rising listings on the market will depend on several factors. If the Bank of Canada continues to lower interest rates, more buyers may enter the market, potentially stabilizing home prices and leading to increased sales activity. However, if rate cuts are slow or economic uncertainty persists, the market could remain balanced, with buyers taking a wait-and-see approach while sellers adjust their expectations.
The condo market may see further price declines, particularly in oversupplied areas. Investors will play a key role in shaping the market, as their decisions to hold, rent, or sell properties will impact overall supply levels. Detached homes are expected to maintain steady demand, particularly in suburban markets where buyers are prioritizing space and long-term investment value.
A Market in Transition
Canada’s housing market is at a turning point, with rising listings creating a more balanced environment for buyers and sellers. While the increase in supply has helped ease competition and slow price growth, affordability challenges persist, preventing many from entering the market.
For buyers, this is a time to explore opportunities and negotiate better deals, but patience remains key as further market adjustments could create even better conditions. For sellers, adapting to the changing landscape by pricing strategically and making properties stand out will be crucial to achieving successful transactions.
As 2025 unfolds, the housing supply crisis remains a central issue, and whether rising listings will be enough to improve affordability in the long run is still uncertain. While more homes are entering the market, deeper structural changes will be needed to fully address Canada’s ongoing housing challenges.
