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Home sales in Canada continued to rise in November, up 2.8% from October and 18.4% higher than in May, before the first interest rate cut. The boost was driven by gains in Greater Vancouver, Calgary, Greater Toronto, Montreal, and some smaller cities in Alberta and Ontario.

"Sales not only increased, but tighter market conditions also pushed prices up at the national level for the first time in over a year and a half," said Shaun Cathcart, CREA’s Senior Economist. "With the Bank of Canada’s recent rate cut and changes to mortgage rules, we might see a more active winter market than usual."

November Highlights:

• National sales rose 2.8% month-over-month.

• Sales were 26% higher than November 2023.

• New listings were down 0.5% month-over-month.

• The HPI increased by 0.6% from October but is down 1.2% year-over-year.

• The average sale price rose 7.4% from last year.

The sales-to-new listings ratio tightened to 59.2%, up from 57.3% in October, indicating a shift toward a more balanced market.

At the end of November, there were over 160,000 properties listed for sale—8.9% more than last year, but still below the typical level for the season. Inventory dropped to 3.7 months, the lowest in 14 months.

The national average home price in November was $694,411, up 7.4% from last year.

Home sales in Vancouver saw a nice boost in November, thanks to a jump in new listings that helped keep prices steady, according to the local real estate board.

The composite benchmark price for November was $1,172,100, which is slightly down by 0.9% compared to last year and basically the same as October.

Real estate agents in Greater Vancouver reported a 28.1% increase in the number of homes sold compared to November 2023. With a more balanced market, many buyers took advantage of the opportunity. In total, there were 2,181 sales in November, which, while still 12.8% below the 10-year average, is an improvement over the 1,702 sales from the same month last year.

There were also 3,725 new listings in November, a 10.6% increase from 2023 and 5.4% above the seasonal average for the past decade. Overall, the number of active listings in the region reached 13,245, up by 21.2% from last year.

While prices remained stable last month, if the supply of homes doesn’t keep up with rising demand, buyers could face higher prices in 2025. For now, though, the market seems to be holding steady.

As we head into winter, Calgary’s housing market is following typical seasonal trends, with slower activity compared to the fall, but year-over-year demand remains strong. November saw a mix of increased sales in detached, semi-detached, and row homes, though apartment condo sales slowed. Overall, 1,797 sales in November were on par with last year and 20% above long-term averages.

Detached Homes:
Sales for homes priced above $600,000 are rising, while lower-priced homes face limited supply. Although inventory improved, 85% of homes for sale were priced over $600,000, creating varied market conditions. The benchmark price for detached homes was $750,100, up over 7% from last year.

Semi-Detached Homes:
There were 173 semi-detached sales in November, up nearly 5% from last year, supported by more listings and higher supply. With two months of supply, conditions still favor sellers, particularly for homes below $700,000. The benchmark price was $675,100, nearly 8% higher than last year.

Row Homes:
Sales of row homes showed continued strength, rising nearly 3% year-to-date. Despite inventory improvements, supply remains tight with about two months of available homes. The benchmark price was $454,200, up nearly 7% from last year.

Apartment Condominiums:
Sales for apartment condos slowed from last year’s record, but still remained well above long-term trends. Increased listings pushed supply levels higher, easing price pressure. The benchmark price was $337,800, up 9% from last year.

Regional Highlights:

• Airdrie: Supply levels are returning to pre-2020 norms, with a 4% increase in the benchmark price, now at $543,300.

• Cochrane: A surge in new listings drove strong sales, with the benchmark price at $568,600, up 4% from last year.

• Okotoks: A dip in new listings kept inventory low, with prices rising 6%, bringing the benchmark price to $624,000.

Overall, the market remains active, though conditions vary by property type and price range.

The Canadian housing market is set to find its footing in 2025, as lower interest rates and new lending rules are expected to attract more buyers. The real estate company predicts that the average home price in Canada will rise by 6% year-over-year, reaching $856,692 by the fourth quarter of 2025, aligning with long-term trends.

Single-family detached homes are expected to see a 7% price increase, hitting a median value of $900,833, while condos are forecast to grow by 3.5%, reaching $605,993. "There’s a growing backlog of buyers ready to enter the market, and upcoming changes to mortgage lending rules will help boost Canadians' borrowing power," says Phil Soper, President and CEO of Royal LePage.

Regional Price Trends: A Strong Demand Across Canada

The forecast suggests price growth in major Canadian markets, with Quebec City leading the way with an 11% price increase. Edmonton and Regina are expected to see a 9% gain each. Greater Montreal is predicted to rise by 6%, while the Greater Toronto Area is projected to grow by a more moderate 5%. Metro Vancouver is expected to see a 4% increase.

Good News for First-Time Buyers: New Lending Rules

Starting December 15, 2024, new mortgage rules are expected to help first-time buyers and those purchasing new homes. These changes include eligibility for 30-year amortizations on insured mortgages and an increase in the mortgage insurance cap from $1 million to $1.5 million.

First-time buyers will be the main beneficiaries of these changes, as they’ll be able to borrow more with a smaller down payment, bringing them closer to owning their first home. This will likely encourage more builders to start new projects, which is exactly what the market needs.

What to Expect in 2025

The first quarter of 2025 is expected to bring the strongest gains, driven by an early spring market. National home prices are projected to rise 2% from Q4 2024 to Q1 2025. After that, growth is expected to slow slightly, with 1.5% gains in the second and third quarters, and 1% in the final quarter of the year.

2025 will bring a sense of normalcy to the market. After a few years of unusual ups and downs, the signs point to a return to stability next year. The recent shift in the Bank of Canada’s monetary policy—from focusing on fighting inflation to boosting the economy—has contributed to this optimism.

A British Columbia man who flipped 14 properties in just four years has been hit with a $2 million fine for tax evasion. Balkar Bhullar, a Richmond resident, was convicted of failing to report nearly $7.5 million in income from 2011 to 2014. The Canada Revenue Agency (CRA) announced that Bhullar was sentenced on December 19 to a conditional sentence of two years less a day, along with a fine of approximately $2.15 million, which matches the amount of unpaid federal taxes. Bhullar had pleaded guilty in August 2023 to one count of tax evasion, related to undeclared earnings from assignment fees on the 14 properties he flipped.

Assignment fees involve transferring a property purchase contract from one buyer to another. The CRA has highlighted its ongoing efforts to combat tax fraud in the real estate sector, which includes cracking down on property flippers.

In response to concerns about speculation in the housing market, a new home-flipping tax will be implemented in B.C. starting January 1. This tax, which could reach up to 20%, will apply to homeowners who sell a property within two years of buying it. According to the Ministry of Finance, around 4,000 properties are expected to be affected by the tax in 2025, with all the revenue directed toward housing programs.

B.C. Finance Minister Brenda Bailey stated that the tax is designed to help increase the supply of affordable homes by discouraging speculative investors looking for quick profits. However, the B.C. Real Estate Association has raised concerns, warning that the tax may prompt sellers to delay listing their homes, which could reduce the availability of resale properties and exacerbate housing market shortages

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