Canadian home sales fall 2.3% in September, CREA says

Canadian home sales fell 2.3 per cent in September from August, the Canadian Real Estate Association (CREA) said Friday, as higher fixed mortgage rates and the prospect of a Bank of Canada rate hike kept buyers on the sidelines.

CREA’s national release, published Oct. 16, said unadjusted activity was 7.7 per cent below September 2025. The national average sale price was $666,538, down 1.6 per cent from a year earlier.

The pullback ended four months of modest gains. The association’s MLS Home Price Index dipped 0.4 per cent from August and was down 3.4 per cent from a year earlier, the largest annual decline since January. CREA said prices fell in Ontario as demand softened, while gains on the Prairies, in Quebec and on the East Coast moderated.

Shaun Cathcart, CREA’s senior economist, said the result was “hardly surprising given the latest jump in fixed mortgage rates,” and that the Bank of Canada is “now widely expected to follow with a rate hike before the end of the year,” according to Reuters.

Reuters reported that the central bank is not expected to move at its next decision on Oct. 28, but that money markets are pricing in a 25-basis-point increase in December. Economists expect a hold on Oct. 28, as we reported on Oct. 15.

The national numbers describe a market that is softening but still balanced by CREA’s own measures. The sales-to-new-listings ratio eased to 48.8 per cent from 49.1 per cent in August, below the long-term average of 54.7 per cent. CREA considers readings of roughly 45 to 65 per cent balanced.

Inventory stood at 4.9 months at the end of September, in line with the long-term average. CREA said fewer than 3.6 months would signal a seller’s market and more than 6.4 months a buyer’s market. Just over 200,000 properties were listed for sale, up 1.8 per cent from a year earlier. New listings fell 1.8 per cent from August, after rising that month.

Garry Bhaura, CREA’s chair, said higher rates make mortgages harder for buyers but may mean more homes to choose from and more negotiating power. He said “a well thought out pricing strategy will become even more important” for sellers.

CREA also cut its 2026 forecast again. It now expects sales to fall 5.2 per cent from 2025, after previously calling for a slight increase, according to a CBC report. It sees sales rising 4.4 per cent in 2027 only under an optimistic scenario with limited Bank of Canada rate changes and more certainty on lending rates.

“Now it’s the uncertainty, and I think a lot of people are going to resist jumping in this fall because of that,” Cathcart told CBC. The broadcaster reported that Vancouver and Toronto were particularly weak in September, and that the Prairies, Quebec and the East Coast, which had been strong for some time, have started to cool.

Local data had pointed the same way. B.C. and Montreal home sales fell in September as prices split, and Vancouver condo sales fell 18.6 per cent. Builders are still active: Statistics Canada reported on Oct. 15 that building permits jumped 8.8 per cent to $13.6 billion on a surge in multi-unit projects.

CREA’s next statistics package is scheduled for Nov. 17.

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Via CREA, Reuters and CBC.