Sales Up, Prices Down, Rents Falling — What’s Really Going On

Canada’s housing market just dropped a fresh set of numbers, and depending on your lens, the story looks like either the start of a recovery - or the next chapter in a much longer crisis. In this episode of The Vancouver Life Real Estate Podcast, we take a comprehensive look at the national sales figures, falling rental rates, long-term home price forecasts, softening inflation, and the controversial foreign buyer ban. The narrative forming around Canadian real estate is one of contradiction - where current data trends directly oppose the longer-term projections.

Starting with national home sales, July marked the fourth straight month of gains, with sales rising 3.8% month-over-month and a cumulative 11.2% increase since March. The GTA led the rebound, surging 35.5% from spring lows. Year-over-year, sales rose 6.6%. However, new listings and inventory remained virtually flat, with total active listings up 10.1% from last year. Despite these gains, sales volumes remain historically low. Benchmark prices are still down 3.4% compared to last year, though average prices are up a modest 0.6%, painting a picture of a market in limbo — balanced, but directionless.

On the rental front, data from Rentals.ca and Urbannation shows a surprising national decline of 3.7% in average rents, bringing the Canadian average to $2,121/month. Vancouver saw a notable 9% drop year-over-year, with tenants now spending 37.5% of their income on rent — well above the 30% affordability threshold. One-bedroom units in North Vancouver now average $2,630, the highest in the country. However, the GTA presents a dramatically different picture. A report shows that Toronto is on track for a 235,000-unit rental deficit over the next decade, driven by a collapse in condo presales and a 50% drop in housing starts. Without swift policy changes — such as lowering DCCs, accelerating approvals, and expanding CMHC support — the GTA could face surging rental costs and a worsening affordability crisis.

Meanwhile, a new long-term forecast from Concordia University suggests that Vancouver detached home prices, currently averaging $2.4 million, could reach $3 million by 2032. Even if housing completions double — a goal many doubt is achievable — prices are still projected to rise to $2.8 million. On paper, this equates to a manageable 3.2% annual increase, yet it underscores the structural imbalance in supply and demand that continues to define Vancouver’s market.

Inflation data offered some good news, dropping to 1.7% in July — the lowest since February 2021 — largely due to declining gasoline prices. However, shelter costs oddly ticked up, despite falling home prices, rental rates, and interest rates. Core inflation metrics remain stubbornly above target, with median and trimmed measures sitting at 3.1% and 3.0% respectively. Even so, the odds of a Bank of Canada rate cut in September increased from 26% to 36%, as slowing inflation combines with broader economic uncertainty.

One of the most thought-provoking topics in this episode is the renewed conversation around Canada’s foreign buyer ban. Developers are lobbying to lift the ban for pre-construction units to revive sales, but public sentiment remains firmly opposed.

Yet few acknowledge the irony: Canadians are the second-largest group of foreign buyers in the U.S., purchasing $6.2 billion worth of real estate in the past year. While countries like New Zealand and Switzerland restrict foreign ownership, Canadians remain free to buy abroad without similar restrictions. The U.S. has not imposed any such ban — and Canadians continue to snap up property there, especially in Florida.

Ultimately, this episode doesn’t offer a clean conclusion because the data doesn’t either. Sales are up, but from record lows. Prices are down, but future projections remain more bullish. Rents are falling in the West but threaten to explode in the GTA in the years to come.

Inflation is cooling, yet rate cuts remain uncertain. And while Canadians oppose foreign ownership at home, they enjoy the benefits of buying abroad. This is a housing market — and a policy environment — defined by contradictions. Whether this is the beginning of a bounce or the calm before another storm, one thing is clear: how Canadians view real estate is changing fast, and likely for good.


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