Canadian home sales and prices fell in September as mortgage costs bite
The national benchmark price fell 0.4% during the month and was 3.4% below a year earlier.
Canadian home sales fell 7.7% in September compared to a year earlier, with prices also declining as higher mortgage costs continued to weigh on the market.
There were 36,657 residential sales in September, the Canadian Real Estate Association (CREA) reported.
The national benchmark price fell 0.4% during September and was 3.4% below a year earlier, while the average sale price fell 1.6% annually to $666,538.
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CREA blamed the weaker outlook on another increase in fixed mortgage rates and uncertainty over how far variable rates may rise.
"A buyer can negotiate thousands off the purchase price and still face a payment they cannot carry," the association said in its analysis.
Sales fell 2.3% from August after seasonal adjustment, indicating the decline went beyond the usual seasonal change.
Nationally, there were slightly more than 200,000 homes for sale at the end of September, up just 1.8% annually and close to the historical norm.
Canada had 4.9 months of inventory after seasonal adjustment, a ratio that compares the stock of listings with the current sales pace.
Provincial totals varied, with British Columbia having 7.0 months of inventory, Manitoba at 2.4, Saskatchewan at 3.4, and Ontario at 4.7.
Ontario’s sales-to-new-listings ratio was only 41.9%, even with fewer months of inventory than B.C.
CREA’s October forecast points to renewed energy-related inflation risks and a more hawkish Bank of Canada, making the assumption of an easy return to cheaper borrowing harder to defend.
The association forecasts a 0.2% increase in the national annual average sale price to $681,681 in 2026.
Ontario’s average is forecast to fall 3% to $809,334, and B.C.’s to fall 0.8%, while gains elsewhere keep the national number slightly positive.
Newfoundland and Labrador has the strongest expected average-price growth this year at 5.7%, followed by Saskatchewan at 5%.
CREA expects both to slow in 2027, to 3.1% and 2.5% respectively.
The national average is projected to reach $689,909 in 2027, up 1.2%, while Ontario’s forecast gain is 0.7%, to $815,100.
Greater Toronto’s September benchmark was 14.7% below its September 2021 level, while Hamilton-Burlington was down 15.3%.
In contrast, Calgary was 24.6% higher over the same period, Quebec City was 54.4% higher and St. John’s was 41.2% higher.
CREA now expects 444,530 sales in 2026 and 464,235 in 2027.
The forecast rebound of 4.4% would leave annual sales 4,436 below 2025, meaning even the recovery scenario falls short of that earlier year’s activity.
"The confident pitch about pent-up demand has become harder to hear over repeated forecast cuts," CREA said.
Its 2027 outlook says buyers are expected to return after economic growth, renewed population growth and a clearer interest-rate path help them along.
"Calling demand pent-up does not make it financeable," the association added.
That forecast also assumes limited further action by the Bank of Canada.
"September showed how quickly higher borrowing costs can interrupt a recovery," CREA said.
Your Space Hamilton reported in October that Mississauga home prices rose in September but remain below last year.
CREA released its September 2026 monthly statistics and MLS Home Price Index package and its October 2026 housing forecast on October 16.
With files from Storeys