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Canada's Home Sales Extend Gains in June, but Ample Supply to Limit Price Recovery, Scotiabank Says

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The steady recovery in June sales activity in Canada suggests housing demand is gradually improving as population growth normalizes and economic conditions strengthen, according to Scotiabank Economics in a note.

Canada's housing sales rose for the third straight month, increasing 0.5% in June on a seasonally adjusted monthly basis, the bank stated in a note after Wednesday's data from the Canadian Real Estate Association (CREA).

Price trends also showed tentative signs of stabilizing as the national benchmark MLS Home Price Index (HPI) was unchanged in June after posting monthly declines every month since February 2025.

However, "the expected sustained recovery in housing demand will put upward pressures on prices, but they will be muted by firm housing supply over our forecast horizon," wrote Patrick Perrier, director of forecasting at Scotiabank, in Wednesday's note.

Recent housing starts have remained well above pre-pandemic levels, contributing to a rise in completed but unsold units. Until demand strengthens further, the recovery in Canadian home prices is expected to remain gradual, added the bank.

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