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The ongoing debate over Canada's ban on foreign homebuyers, initially introduced in 2023 and extended for an additional two years in February 2024, has stirred up considerable discussion within the mortgage industry. The federal government implemented the ban with the intention of easing home availability for Canadian residents, claiming that restricting foreign ownership would lead to more housing opportunities. However, as the housing market continues to face a slowdown, many within the sector are questioning whether the policy has had the desired effect or if it may be contributing to further complications in the housing sector.

A July 29 open letter directed at the government by a group of Canadian business and real estate leaders highlighted the concerns of those impacted by the ban. The letter argued that the policy was counterproductive, placing undue pressure on home construction, risking job losses, and exacerbating the existing affordability crisis. The call to reassess the ban also included a recommendation for the provincial government of British Columbia to reconsider its tax on foreign buyers, which had provoked a firm response from provincial officials determined to avoid a return to overheated markets fueled by foreign investment.

In early 2024, the federal government extended the ban on foreign homebuyers until 2027. This decision was backed by officials who emphasized that the restriction would help manage affordability issues and increase the housing supply for Canadian buyers. However, critics have suggested that the ban's impact on the housing market has been minimal. Some industry experts pointed out that while the policy may have limited the number of foreign buyers, luxury home prices have largely remained stable, showing that the ban has had little effect on addressing the broader housing affordability challenges faced by Canadians.

Statistics on foreign ownership support this view, with data indicating that foreign buyers represented just about 1% of the housing market in 2024, down from 2-3% in previous years. The impact of foreign buyers is primarily seen in high-end markets in major cities like Toronto, Vancouver, and Montreal, which does little to alleviate the pressure on first-time homebuyers in need of affordable options. The decline in foreign ownership coincides with a drop in immigration, which has historically helped fuel demand for housing in Canada.

Despite mixed opinions from industry experts, public support for the foreign buyer ban remains strong. Surveys show that a significant majority of Canadians, including a wide range of political affiliations, continue to support the federal ban on foreign real estate purchases, which is set to remain in effect until 2027. Some economists and real estate experts suggest potential alternatives, such as allowing foreign buyers to purchase only newly built homes, which could help stimulate investment without further inflating resale prices. This approach may also provide relief to developers struggling with stalled projects, offering them a chance to move forward with much-needed housing construction.

In August, the Greater Toronto housing market showed signs of strain, despite a slight uptick in buyers. Although sales saw a modest year-over-year increase, overall demand remains historically low and far from stabilizing. At the same time, a surge in new listings led to record-high inventory levels, putting downward pressure on prices. The imbalance between supply and demand has intensified, making it clear that the market is still struggling to recover.

Home prices continued their descent, with the average price of a typical home falling by over $11,000 in August alone. This marks one of the largest monthly drops in the past year and contributes to a broader downward trend. Prices have now fallen more than 24% from their early 2022 peak, showing just how far the market has retreated from the high point of the recent boom. The pace of decline is concerning for both sellers and industry observers hoping for a turnaround.

Despite a slight year-over-year rise in sales, overall activity remains very weak by historical standards. Sales in August were among the lowest in the past quarter-century for that month, surpassed only by last year’s even lower figures. The scale of the gap between current and normal levels is staggering sales would need to more than double just to match more typical pre-pandemic volumes. Without a significant shift in market conditions, a return to those levels seems unlikely.

Inventory growth has become one of the defining features of the current market. New listings continue to rise rapidly, bringing total active listings to their highest level on record for the month of August. The pace of this increase has been dramatic, pushing inventory levels to nearly triple what they were just a few years ago. This glut of supply is putting additional pressure on sellers, many of whom are struggling to compete in a saturated market.

While some may take comfort in the small rise in sales, it does little to offset the overwhelming growth in inventory. The imbalance suggests that the market is still in correction mode, especially with more supply expected as new construction projects are completed. Many of these new units were purchased by investors, some of whom may now be forced to sell due to underperforming rental yields. As this trend continues, the regional market could further drag down national housing figures, especially in areas that haven’t yet felt the full weight of the correction.

For years, home ownership in Canada's largest housing markets seemed like an unattainable dream, especially for first-time buyers in cities like Toronto and Vancouver. Prices soared to all-time highs, and interest rates made securing a mortgage a challenge for many. However, recent shifts in the market are offering a glimmer of hope. As interest rates stabilize and property prices remain relatively low, prospective buyers are beginning to re-enter the market. According to real estate experts, this could be one of the best times in years for first-time buyers to make a move.

Many professionals describe the current situation as a "buyer's market," particularly for those interested in purchasing condos. The key difference now is that buyers have more bargaining power and ample time to explore their options. With a high supply of properties and less urgency in the market, buyers are no longer under the pressure to act quickly, as they were in previous years. In cities like Toronto, what used to be an unaffordable option, like a small condo priced at $600,000, is now offering decent one-bedroom units. In some cases, even moving slightly outside the city can offer buyers the opportunity to purchase larger homes, like three-bedroom properties.

While many are optimistic about the market conditions, some experts caution that potential buyers shouldn't feel rushed. There's no immediate pressure to "buy now or never," as home prices are unlikely to spike dramatically as they did in previous years. Economic uncertainties, like ongoing trade tensions and interest rate fluctuations, suggest that homebuyers still have time to carefully consider their choices. Real estate analysts believe that the next several months will bring more clarity to the market, and buyers can afford to take a measured approach instead of rushing into a decision.

The Canadian real estate market experienced significant volatility over the past few years, with home prices peaking in early 2022 before seeing a sharp decline. Between February 2022 and mid-2023, the average price of a home in Canada dropped by nearly $150,000. However, as interest rates decreased in late 2024, the market began to stabilize, and there's now a noticeable uptick in home resell activity across the country. While there's still some caution in the air, the rebound of pent-up demand points to a potential market turning point, especially in Ontario and British Columbia.

For first-time buyers, however, the picture isn't so clear-cut. While lower interest rates and more supply have improved affordability in some markets, the reality of rising prices in certain regions like Saskatchewan, Winnipeg, and parts of Atlantic Canada still poses challenges. Even in Toronto, where one-bedroom condos are more affordable than before, the need for a substantial income to secure a mortgage remains. With a 20% down payment on a $600,000 property, a potential buyer would need to earn at least $100,000 annually. Additionally, beyond the cost of the mortgage, there are property taxes, maintenance fees, and insurance to consider, making it essential for first-time buyers to weigh all financial aspects carefully before taking the plunge.

Improved housing supply has shifted Calgary’s real estate market, contributing to price declines across several property types. Apartment and row-style homes have seen the most notable reductions due to significant increases in available inventory, while detached and semi-detached homes have experienced more modest pricing changes. As of August, the city’s total residential benchmark price dropped to $577,200—down from the previous month and nearly four per cent below the same period last year.

Sales activity in August totaled 1,989 transactions, representing a nine per cent decline year-over-year. Despite this drop, demand remains stronger than long-term averages. However, a surge in new listings has pushed total inventory to 6,661 units—the highest level for August since 2019. The resulting sales-to-new-listings ratio sits below 60 per cent, indicating a shift toward more balanced market conditions and away from the sellers’ market dominance of recent years.

Detached homes saw a softening in sales and a rise in new listings, particularly in areas like the North East, where buyer market conditions are emerging. Inventory in this segment reached its highest August level since 2020. The benchmark price for detached homes declined to $755,600—down nearly one per cent from both the previous month and the previous year. While the North East and East districts experienced the steepest declines, the City Centre recorded continued price growth.

In contrast, the semi-detached and row housing segments showed mixed results. Semi-detached homes held relatively tighter market conditions, with fewer new listings and a sales-to-new-listings ratio of 67 per cent. This helped limit inventory growth and kept prices more stable. The benchmark price for semi-detached properties stood at $687,200—slightly below last month but still one per cent higher than last year. Meanwhile, row homes continued to face rising inventory and weakening sales, pushing prices down for the fourth month in a row. August’s benchmark price for row homes dropped to $439,600, nearly five per cent lower year-over-year.

The apartment condominium market has been the most impacted by the increase in supply. Inventory rose to a record 1,979 units in August, and the sales-to-new-listings ratio fell to just 51 per cent. These supply pressures led to five straight months of price declines, with the benchmark apartment price falling to $326,500—almost six per cent below last year’s level. The North East district experienced the steepest price decline at over 11 per cent, followed by smaller drops in the City Centre and West districts.

Airdrie is also adjusting to shifting market conditions. Sales in August fell to 152 units, contributing to a 12 per cent year-to-date decline. Meanwhile, 265 new listings pushed the sales-to-new-listings ratio to 57 per cent, keeping inventory growth in check. With 535 active listings—the highest level since before the pandemic—the market has moved toward balanced conditions. However, increased supply has placed downward pressure on prices, with the benchmark price falling to $531,100, down four per cent from last August.

Cochrane experienced 70 sales in August, while 139 new listings entered the market. The resulting 50 per cent sales-to-new-listings ratio is the lowest for August since 2015. Although inventory levels didn’t change significantly, months of supply rose above four. Despite this, benchmark prices remained stable at $589,100—similar to July’s figure and nearly two per cent higher year-over-year. On a year-to-date basis, prices in Cochrane are up by four per cent compared to last year.

Okotoks showed stronger seller conditions in August, as new listings declined significantly while sales remained steady. The sales-to-new-listings ratio surged to 80 per cent, limiting inventory growth. Although inventory levels are 29 per cent higher than last year, they remain 30 per cent below typical August levels. These tighter conditions helped support prices, with the year-to-date benchmark remaining two per cent higher than in 2024. However, some minor monthly price declines were observed.