TORONTO, October 17, 2025: Canada’s housing market showed further signs of cooling in September, as national home sales fell for a second consecutive month and average prices edged lower. The Canadian Real Estate Association (CREA) reported a 1.7 percent decline in home sales from August on a seasonally adjusted basis, with activity down in most major cities, including Vancouver, Calgary, Edmonton, Ottawa, and Montreal.
Non-seasonally adjusted data showed sales were up 5.2 percent year-over-year, but CREA’s Aggregate Composite Home Price Index fell 0.1 percent from August and dropped 3.4 percent compared with September 2024. The association also revised its national forecast for 2025, projecting a 1.1 percent annual decline in home sales and a 1.4 percent decrease in the average home price. Sales are expected to rise 7.7 percent in 2026, with prices increasing 3.2 percent.
The slowdown in resale activity contrasts with a significant pickup in new housing construction. The Canada Mortgage and Housing Corporation (CMHC) said housing starts rose 14 percent in September to a seasonally adjusted annualized rate of 279,234 units. The increase was driven by multi-unit urban starts, particularly in Toronto and Vancouver, reflecting continued demand for new housing stock in high-density areas.
Despite stronger construction numbers, overall market conditions suggest buyers remain cautious. The national sales-to-new listings ratio stood at 51.2 percent in September, down from 56.2 percent a year earlier. That figure, close to the lower end of CREA’s balanced market range, indicates less competitive conditions and slower sales activity across many regions.
Inventory grows while buyer activity slows
In Toronto, the country’s largest housing market, total home sales rose 8.5 percent in September from a year earlier, but the average selling price declined 4.7 percent. The Toronto Regional Real Estate Board reported that new listings were up more than 44 percent year-over-year, suggesting rising inventory is contributing to downward pressure on prices.
RBC Economics reported that national home resale activity has increased approximately 22 percent over the past four months, but the firm noted the recovery has been modest and uneven. While some markets have seen improvement, resale values remain well below early 2022 peaks, with a national decline of 25 percent from that high.
Affordability continues to be a key issue for many prospective buyers. According to data from major financial institutions, five-year fixed mortgage rates remain above 4 percent, even after the Bank of Canada reduced its benchmark interest rate to 2.5 percent earlier this fall. Elevated borrowing costs, combined with higher living expenses, are limiting purchasing power and reducing demand in certain segments of the market.
Ottawa and Vancouver reflect broader national trend
In Ottawa, home sales were lower in September, and prices also trended downward, consistent with national patterns. Inventory levels have increased from last year, giving buyers more options and reducing urgency. Meanwhile, in Vancouver, sales volumes dipped again following a brief summer rebound, and prices continued to stabilize.
Nationally, the average price of a home in Canada was approximately CAD 655,000 in September, down from over CAD 700,000 in early 2022. The number of months of inventory, a measure of supply, increased to 4.1 in September, up from 3.7 months a year earlier, reflecting slower turnover and longer time on market.
While housing starts remain robust, resale market indicators suggest a continued adjustment phase as prices correct and demand adapts to current financial conditions. Policymakers and industry stakeholders are closely watching regional data to assess the impact of rate changes and supply dynamics on the broader housing landscape. – By Content Syndication Services.