After four months of gradual but steady gains, Canada’s housing market saw sales decline in September, data from the Canadian Real Estate Association showed on Thursday.
However, this was the best month of September for sales since 2021, CREA senior economist Shaun Cathcart said.
“While the trend of rising sales that began earlier this year took a breather in September, activity was still running at the highest level for that month since 2021, and that was true in July and August as well,” Cathcart said.
Compared with August, home sales in Canada declined by 1.7 per cent, marking the first monthly decline since April.
The decline came largely because of falling sales in five major markets — Greater Vancouver, Calgary, Edmonton, Ottawa and Montreal — CREA said.
However, the Greater Toronto Area and Winnipeg saw minor gains in September.
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Canada’s housing market is seeing an “uneven and fragile” recovery, according to a recent report by the Royal Bank of Canada. Realty group Royal LePage is predicting a recovery by 2026.
CREA’s data suggests stronger sales in the last months of the year, Cathcart said.
“With three years of pent-up demand still out there and more normal interest rates finally here, the forecast continues to be for further upward momentum in home sales over the final quarter of the year and into 2026,” he said.
Despite “tariff chaos and economic uncertainty” that led to a slower spring housing market, there has been a steady climb back since the spring, CREA said in its report, “suggesting the long-anticipated return of buyers into the market was likely only delayed and dampened, but not derailed.”
CREA is projecting that 473,093 residential properties will trade hands this year – a 1.1 per cent decline compared with 2024.
By the end of the year, the average home price in Canada is forecast to be $676,705, a decline of 1.4 per cent compared with 2024. This is driven by declines in only two of Canada’s provinces, British Columbia and Ontario.
The slower-than-usual housing market in 2025 could give way to the strongest year for housing sales since 2021, CREA said. In 2026, 509,479 homes are forecast to be sold – a rebound of 7.7 per cent from this year’s tepid market.
Property values are also expected to rise in 2026, with the average home price forecast to rise 3.2 per cent to $698,622.
Construction began on more houses this month, the Canada Mortgage and Housing Corporation (CMHC) said on Thursday.
Monthly housing starts were up for all areas in Canada by 14 per cent in September (279,234 units) compared with August (244,543 units).
“Notably, Montréal and Toronto were responsible for more than a quarter of the total monthly starts nationally, primarily due to increased rental apartments starts,” said Tania Bourassa-Ochoa, CMHC’s deputy chief economist.
“While these results indicate some resilience, it is worth noting that current housing starts levels are generally reflective of decisions made months or even years ago when investor confidence was higher than it is today.”
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