Canadian Real Estate Market Showing Signs of Stability
Canada’s housing market is beginning to show encouraging signs after more than a year of declining prices. In June, the national MLS® Composite Benchmark posted its first monthly increase in 16 months, rising 0.05% to $657,700. Condo prices also recorded their first monthly gain in nearly three years, increasing 0.65%, while the sales-to-new-listings ratio improved to 50.2%, suggesting market conditions are becoming more balanced.
Market activity continues to strengthen gradually. National home sales increased 0.5% in June, marking the third consecutive monthly gain, while inventory remained healthy at 4.8 months, close to the long-term average. Affordability has also improved significantly, with the average home now costing 4.24 times a dual median wage, compared with 5.95 times at the market peak in February 2022, making homeownership more attainable for many buyers.
While the market appears to have found a floor, challenges remain. Higher interest rates, slower population growth, and reduced immigration are expected to keep the pace of recovery measured rather than rapid. For buyers who have been waiting on the sidelines, improving affordability and stabilizing home prices may present new opportunities as confidence gradually returns to the Canadian housing market.
Our Take: The real estate market has seen it’s challenges over the last few years. Stats appear to show prices levelling off even though sales remain slower. Mortgage rates are normalized in the 4% range (this is where rates were pre-covid). In perspective, homes are much cheaper to buy now than they were at the height of the covid peak when the cost of home ownership was much higher even with the substantially lower rates at the time.
Bank of Canada Holds Policy Rate at 2.25%
On July 15, 2026, the Bank of Canada held its target for the overnight rate at 2.25%, which means that the Prime Rate will remain at 4.45% for at least the next 6 weeks. The Bank believes the current policy rate is appropriate to support Canada’s economic recovery while helping inflation return to its 2% target.
Canada’s economy is beginning to show signs of improvement, with second-quarter growth estimated at 2½%. Consumer spending remains solid, housing activity appears to be stabilizing, and export growth has resumed. However, the labour market remains soft, with the unemployment rate at 6.5% in June. The Bank expects GDP growth of 0.7% in 2026, followed by 1.8% growth in both 2027 and 2028.
Inflation rose to 3.2% in May, largely because of higher gasoline prices connected to the conflict in the Middle East. Excluding gasoline, inflation was 2.2%, while core inflation remained close to 2%. The Bank expects inflation to stay elevated in the near term before gradually easing to around 2% in early 2027. With global uncertainty still high, the Bank will continue monitoring economic growth, inflation, oil prices and trade developments before making future rate decisions.
Our Take: There are two real issues here: 1) The cost of living and 2) Full time employment. At this point, the cost of living is still high for the average Canadian – regardless of what the numbers show. We see this everyday in the clients we work with and in the prices we are all paying for basic goods. The price of fuel is factored into everything we consume and this cost is has been higher for quite some time. In regards to employment, we see many people struggling to find full time employment or being laid off from jobs. This will definitely slow down future economic growth numbers in the next 6 to 12 months as these people cannot contribute to economic growth without income.
If you need more information regarding mortgages or if you need any advice on your personal situation please contact our office at 604-556-3893 or email at alex.kotai@ymscanada.ca.
For more information on our mortgage products and your preferred Abbotsford Mortgage Broker please visit our website at www.ymscanada.ca.
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