Why is there a lack of new home listings in Canada?

Something unusual is happening across most Canadian housing markets this year. In the past, as the springtime was approaching, new home listings were usually rising more strongly than home sales.

This year, the opposite is the case.

Why is there a shortage of new home listings in Canada? What makes homeowners reluctant to bring their homes to the market? How is this trend affecting home prices? And most importantly, what can we expect for the remainder of this year?

A look at the latest data for the main markets in Toronto, Montreal, Calgary, and Vancouver suggests possible answers.

Among the best indicators of the state of a housing market are comparative trends in home sales and new home listings. The sales-to-new-listings (S/NL) ratio of, say, 0.5 simply means that in a given month there are 50 sales for every 100 new listings. Traditionally, a ratio in the 0.4 to 0.6 range is considered a sign of a “balanced” market, while ratios above or below that range indicate “sellers’” and “buyers’” markets, respectively.

The S/NL ratio in Canada’s housing market rose in all four months of 2023, from 0.53 in January to 0.72 in April. At this S/NL level, the country’s home market is clearly in “sellers’” territory where sellers have an advantage over buyers in a negotiating process. A look at the main regional markets confirms the trend.

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Data is supplied by Pillar 9™ MLS® System. Pillar 9™ is the owner of the copyright in its MLS®System. Data is deemed reliable but is not guaranteed accurate by Pillar 9™.
The trademarks MLS®, Multiple Listing Service® and the associated logos are owned by The Canadian Real Estate Association (CREA) and identify the quality of services provided by real estate professionals who are members of CREA. Used under license.