By Paul Vieira
OTTAWA--Canadian existing-home sales rose in May at the fastest pace since the fall of 2024, or before President Trump won a second term and imposed biting tariffs on some of Canada's key manufacturing sectors.
Real-estate brokers and economists are increasingly confident that May's jump marks the start of a rebound, albeit modest, after an extended slump in Canadian real estate. Sales and listings are either down or flat from a year ago, and benchmark house prices have declined for 16 straight months. All told, home prices are down nearly 21% from a February 2022 peak, prior to an aggressive rate-increasing campaign to tame historically high inflation.
The Canadian Real Estate Association said Tuesday that existing-home sales on a seasonally adjusted basis rose 5.5% in May from the prior month, adding this was the first month in 2026 to demonstrate a meaningful increase in demand. On an unadjusted basis, sales fell 5.1% from a year ago. The 5.5% month-over-month increase is the largest since October 2024.
"Under the surface conditions have been improving for some time," said Shaun Cathcart, an economist at the real-estate group. He said expectations among sellers and buyers are becoming aligned, citing a tightening sale-to-list price ratio and shorter periods between listing and sale dates.
The association's data indicated that benchmark house prices, calculated in a similar fashion to the S&P Cotality Case-Shiller National Home Price Index, fell 0.1% from the prior month and nearly 4% from a year ago. The association said May's drop represented the smallest decline since January 2025.
"It appears that the price destruction phase is running its course, at least for single-family homes," said Robert Kavcic, an economist at BMO Capital Markets. "We could now be settling into a phase where pent-up demand meets lower prices to bring volumes back."
Garry Bhaura, a real-estate broker in the Toronto suburb of Brampton, Ontario, and chairman of the real-estate association, said the May data point to a pickup in activity during the historically busy spring season. He said he's hoping that buyers and sellers who have remained on the sidelines will change their minds given a pickup in sales activity.
The Canadian residential real-estate market, once a powerful engine of growth, has stalled. Analysts attribute the slowdown to higher mortgage rates, a sharp retreat in population growth, and weak underlying conditions that have been exacerbated by U.S. trade policy.
Statistics Canada data indicate that investment in Canadian residential structures fell 7.9% annualized in the first quarter, following a 9.4% drop in the final three months of 2025. On a 12-month basis, residential investment fell 3.3% in the first quarter.
The Bank of Canada anticipates that economic growth will resume in the second quarter, following two straight periods of contraction. Part of its optimism is tied to increased stability in housing activity.
Brendon Ogmudson, chief economist at the British Columbia Real Estate Association, said preliminary figures for June suggest that the sales pickup has legs. Existing-home sales in greater Vancouver, British Columbia - Canada's third-largest city and one of the country's most-expensive real-estate markets - are currently on pace to record their best June in about three years. "It's still about 18% below the 10-year average but encouraging nonetheless," Ogmudson said in a post on LinkedIn.
Write to Paul Vieira at paul.vieira@wsj.com
(END) Dow Jones Newswires
06-16-26 1019ET
