Although the fall has historically been a busy time for home sales, Canadian home sales are breaking from the narrative this year, according to the Canadian Real Estate Association’s (CREA) latest report.
Home sales were down 2.3% month over month in September, while prices edged down 1.6%. At the same time, new supply declined again last month, while inventory grew. The changes come as Canada braces for potential rate increases from the Bank of Canada, following the U.S. increasing rates in September.
“After a four-month run of modestly positive progress on demand, supply, and prices, many of Canada’s housing markets took a step back in September,” CREA’s Senior Economist Shaun Cathcart said. “This was hardly surprising given the latest jump in fixed mortgage rates, and with the Bank of Canada now widely expected to follow with a rate hike before the end of the year.”
Canada Faces Broad Sales Decline in September
Across all of Canada, sales declined 8.3% year-over-year, the largest decline so far in 2026.
Year-over-year sales fell in all but five of the 26 areas included in CREA’s report. The steepest decline was in Sudbury, down 19.4% year over year. Although previous months have shown losses concentrated in certain provinces, the other top five year-over-year decreases were spread across several provinces in September, including:
- Hamilton-Burlington, ON: 16.6% decline
- Victoria, BC: 16.4% decline
- Saguenay CMA, QC: 13.1% decline
- Edmonton, AB: 12.1% decline
- Saskatoon, SK: 11.8% decline
Rather than a regional issue, the data in September points to a larger shift in the market, resulting from high levels of economic uncertainty as rates are poised to rise.
Ontario Feeling Downward Price Pressure
The average sales price year-over-year dropped 1.4% across Canada in September, from $665,974 to $656,680. That being said, not all areas were impacted equally. The most widespread price declines were in Ontario, with price decreases seen in eight of the nine areas CREA tracks:
- Hamilton-Burlington: 5% decline
- Kitchener-Waterloo: 7.9% decline
- London and St Thomas: 5.7% decline
- Niagara Region: 9.7% decline
- Ottawa: 1.2% decline
- Sudbury: 9.5% decline
- Greater Toronto: 5.1% decline
- Windsor-Essex: 1.8% decline
The sole exception to price declines in Ontario was Thunder Bay, where year-over-year prices actually increased 12.8% from $362,693 to $409,164.
Outside of Ontario, prices also increased in Alberta, Saskatchewan and Manitoba, with Calgary seeing the largest gain at 6.7%.
Prices across Canada experienced an upward swing from April through August, but the recent changes in mortgage rates and surging oil prices have injected enough uncertainty into the market to make pricing fluctuate.
“In a repeat of what we saw earlier this year when the start of the spring market coincided with a jump in mortgage rates, the start of the fall market has likewise been met with an even larger jump in fixed rates,” CREA Chair Garry Bhaura said. “While that makes the task harder for prospective home buyers as it relates to a mortgage, it will also likely mean more homes to choose from and more negotiating power. For sellers, a well thought out pricing strategy will become even more important.”
BC Sees a Drop-Off In New Listings
Although new listings fell by 5% across all of Canada year over year, the province hit hardest was British Columbia. Fraser Valley had the largest decline in new listings of all areas at 24.3%, while the Greater Vancouver area experienced a 13.9% decrease. Collectively, that’s about 1,700 fewer new listings on the market compared to the previous year.
Losses were also broadly reported across Ontario, with declines ranging from around 4% to 16%. Eastern Canada actually saw new listings increase for the most part, with a 29% increase in the Trois Rivières CMA and a 19.8% increase in the Quebec CMA. Most of these gains were seen in less populated areas, however, meaning that the percent change in new listings in Eastern Canada doesn’t really make up for the losses seen in Central and Western Canada.
Across Canada, about 5,000 fewer new listings entered the market compared to the previous year, while inventory rose about 1.8%. This points to homes moving slower overall, which is reflected in the increase in months of inventory to 4.8.
CREA Updates Resale Report Projections Amid Economic Shifts
Alongside its September report, CREA also released revised projections for the resale housing market on Oct. 16.
The sales activity forecast now predicts there will be a 5.2% decline in annual home sales across Canada by the end of 2026, with the largest declines in Alberta (9% down), Nova Scotia (7.7% down) and Prince Edward Island (7.7% down).
Projections for 2026 also show a 0.2% price increase across the nation, with the largest shifts in Newfoundland (up 5.7%) and Ontario (down 3%).
For 2027, CREA predicts both home sales and prices will increase by 4.4% and 1.2%, respectively.
This marks the second decline in CREA’s projected 2026 resale performance, with the first in June. These shifts were made in response to recent changes in fixed-rate mortgage affordability and a “hawkish” tone from the Bank of Canada, alongside the global energy crisis, which have all impacted borrowing costs, according to CREA.
What These Changes Mean for The Housing Market
Economic uncertainty remains at the forefront of the housing conversation, with lower home sales in September and CREA’s revised 2026 projection for resale housing sitting at a 5% loss. A rate increase from the Bank of Canada and ever-changing oil market prices will ultimately pave the way for how Canada’s housing market will fare through the end of 2026.
“With housing affordability already stretched, the big question going forward is how much farther will the Bank have to go to keep a lid on inflation next year?” Cathcart said. “Until that becomes clearer, this fresh round of uncertainty will likely send some buyers back to the sidelines.”
