In September, the housing market in Canada experienced a slight decline in sales, with a 1.7% drop compared to the previous month, ending a five-month streak of rising sales, according to the latest data from the Canadian Real Estate Association (CREA). A total of 39,938 residential properties were sold nationwide in September, down from 40,615 in August. The benchmark home price decreased by 0.1% on a monthly basis and by 3.4% year-over-year, with the national average price standing at $676,154 for the month.
Despite the Bank of Canada’s interest rate cut from 2.75% to 2.5% in September, sales did not increase. CREA’s senior economist, Shaun Cathcart, mentioned that the timing of the rate cut may impact October’s sales figures and any further rate cuts could have a significant impact in the future.
While regions like the Greater Toronto Area and Winnipeg saw increased sales, areas such as Calgary, Edmonton, Ottawa, Montreal, and Vancouver experienced declines, affecting the overall average, as reported by CREA. Previously, urban centers like Toronto had lower sales activity compared to smaller cities and rural regions, where homes were selling rapidly at record prices. Cathcart noted that the September shift suggests a potential slowdown in these regional trends.
Despite the dip in sales, Cathcart emphasized that the overall sales figures are still higher compared to previous years, showing a 5.2% increase from September 2024 and marking the highest number of sales for the month since 2021. He characterized the current situation as a temporary setback rather than a significant downturn.
Looking ahead, Cathcart highlighted the persistent challenge of housing supply in Canada. The data revealed a 0.8% decrease in new home supply in September compared to the previous month, with a total inventory equivalent to 4.4 months (the long-term average being five months). To prevent a rapid surge in prices due to insufficient housing supply, Cathcart urged policymakers to prioritize aggressive housing development to address the ongoing shortage.
Overall, the housing market in Canada faces evolving dynamics, with sales figures reflecting a nuanced interplay of regional trends and broader economic factors.