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Canada's Housing Market Reaching Price Floor Amid Stable Sales and Listings, BMO Says

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Canadian home prices appear to be bottoming out at the national level, although several regional housing markets continue to show signs of weakness, Bank of Montreal Capital Markets said in a note.

Resale housing data suggest that the market is stabilizing, with sales, new listings, and prices remaining relatively steady, the bank said in the Wednesday note.

"Canadian home prices appear to be setting a bottom," BMO Senior Economist Robert Kavcic wrote. "We don't expect a forceful recovery."

Inflation-adjusted home prices suggest that much of the excess from the pandemic housing boom has been reversed, said the bank. In many markets, resale prices have declined to, or even below, replacement costs, Kavcic said. That's constraining future housing supply and will tighten market conditions, according to BMO.

"Don't be surprised if we're seeing the low for nominal Canadian home prices right now," Kavcic said.

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