Canada’s housing market is in ‘new normal.’ It looks like the ‘old normal’

As the Bank of Canada held interest rates for the third time, economists and real estate experts say the market may not need another rate cut for it to improve.

With the Bank of Canada holding interest rates again, economists and real estate experts say the housing market’s “new normal” may be looking more and more like the “old normal” from before the COVID-19 pandemic.

“What we have now with more supply in the market, like more inventory, homes for sale, and this is what I would consider a little bit more — not everywhere in Canada — but generally speaking more return to the old normal before the pandemic,” said Robert Hogue, assistant chief economist at RBC.

“Actually, probably a lot more before the pandemic with a bit more time for buyers to make decisions.”

Much of the original hesitation from buyers waiting to enter the market in early 2025 was due to the uncertainty of looming and implemented tariffs by the U.S., Hogue said.

He added in the months since, the perspectives of Canadians have changed and the lack of “doom and gloom” is bringing back some homebuyers.

National home sales rose 2.8 per cent in June, building on a 3.5-per cent rise in May, the Canadian Real Estate Association (CREA) said earlier this month.

However, the CREA’s senior economist, Shaun Cathcart, cautioned while homes sales saw a boost — including a 17.3-per cent rebound in the Greater Toronto Area since April — the national picture is a “carbon copy” from May sales figures.

Hogue notes that positivity and growing confidence will benefit the housing market in the long-term, especially as RBC does not expect any further rate cuts.