Canada’s housing market started 2025 with a surge in new listings, but buyer activity slowed, leading to softer market conditions in some regions. According to the Canadian Real Estate Association (CREA), the national sales-to-new listings ratio dropped to 49.3% in January, marking a shift from the mid-to-high 50% range seen in late 2024. While this still falls within the balanced market range of 45% to 65%, it signals increasing supply without a corresponding rise in sales.
Surge in New Listings Amid Softening Sales
In January, new listings increased by 11% compared to December 2024, marking one of the most significant monthly jumps since the late 1980s, excluding pandemic-related fluctuations. The biggest gains were observed in Hamilton-Burlington, where new listings rose by 51.3%, increasing from 918 in January 2024 to 1,389 in January 2025. Greater Toronto followed closely with a 49.2% increase, reaching 12,405 listings compared to 8,312 a year earlier. Greater Vancouver experienced a 43.3% surge, climbing to 5,499 listings from 3,838 year-over-year.
In the Fraser Valley, new listings increased by 41.5%, rising from 2,162 in January 2024 to 3,059 in January 2025. Kitchener-Waterloo experienced a 39.8% jump, with listings climbing from 490 to 685. Calgary followed closely with a 36.7% increase, growing from 2,757 listings to 3,770. Windsor-Essex also posted a strong 32.4% increase, with new listings rising from 700 to 927, reflecting a significant influx of new supply across key markets.
Despite this influx, national sales declined 3.3% month-over-month, with most of the slowdown occurring in the final week of January. Analysts point to uncertainty surrounding a potential trade conflict with the United States as a likely factor impacting buyer sentiment.
“The standout trends to begin the year were a big jump in new supply at an uncommon time of year, as well as a weakening in sales, which only showed up around the last week of January,” said Shaun Cathcart, CREA’s Senior Economist. “The timing of that change in demand leaves little doubt as to the cause – uncertainty around tariffs. Together with higher supply, this means markets that had been steadily tightening up since last fall are now suddenly in a softer pricing situation again, particularly in British Columbia and Ontario.”
Related: Buying a Home or Booking a Trip? The Real Cost of Your Travel Budget
Inventory Levels and Market Conditions
At the end of January, approximately 136,000 properties were listed for sale, a 12.7% increase year-over-year. However, inventory levels remain below the long-term average of 160,000 for this time of year. The national inventory level stood at 4.2 months, up from the high three-month range in late 2024, edging closer to the five-month long-term average. Typically, a seller’s market emerges below 3.6 months, while a buyer’s market takes shape when inventory surpasses 6.5 months.
From Saguenay to Saskatoon: The Markets Seeing Big Gains
Despite shifting conditions, several markets across Canada posted strong year-over-year price gains in January. Quebec saw remarkable growth, with Trois-Rivières CMA recording a 27.5% increase, Quebec CMA rising by 26.1%, and Saguenay CMA up by 17.1%. The Prairies also experienced substantial appreciation, with Regina jumping 15.8%, Sudbury increasing 13.8%, and Saskatoon climbing 12.7%.
Is the Market Tipping Towards Favouring Buyers or Sellers?
Ontario and British Columbia saw a surge in new listings, which could help ease some of the supply constraints that had tightened markets in previous months. However, certain regions saw a decline in listings, including Saint John, which posted a 19.5% drop, Niagara Region, with a 10.2% decline, and Regina, with an 8.6% decrease, signaling potential tightening in these areas.
While sales slowed in January, many analysts still anticipate a busier spring market, provided economic conditions stabilize. “While we continue to anticipate a more active spring for the housing sector, the threat of a trade war with our largest trading partner is a major dark cloud on the horizon,” said James Mabey, CREA Chair. “While uncertainty about the economy and jobs will no doubt keep some prospective buyers on the sidelines, a softer pricing environment alongside lower interest rates will be an opportunity for others.”
From Uncertainty to Opportunity; 2025 Might Surprise You
The national average sale price climbed 1.1% year-over-year to $670,064 in January. While some regions see price corrections, Quebec and the Prairies are still experiencing strong growth.
The increase in listings gives buyers more choices and potential bargaining power, particularly in regions where inventory is rising. Lower interest rates and moderating prices could create favorable conditions for those ready to enter the market. On the other hand, sellers may need to adjust expectations depending on location, as higher supply in some markets could lead to longer selling times and increased competition.
With spring just around the corner, there is optimism that a more active season lies ahead. Those prepared to move quickly and strategically will find opportunities to secure homes that fit their needs and long-term financial goals.
As the countdown to the influential spring market begins, it’s important to stay up to date with the latest market trends and updates. For expert guidance, connect with a trusted local real estate professional to navigate the market and plan your next move.
