In September, the housing market in Canada experienced a slight decline with a 1.7% decrease in home sales compared to the previous month, ending a five-month trend of rising sales, as per the latest data from the Canadian Real Estate Association (CREA). The total number of residential properties sold nationwide was 39,938 last month, down from 40,615 sales in August.
The benchmark home price showed a marginal 0.1% decline on a monthly basis and a 3.4% decrease year-over-year, with the national average home price standing at $676,154 for September.
Despite a September interest rate cut by the Bank of Canada from 2.75% to 2.5%, home sales decreased. CREA’s senior economist, Shaun Cathcart, pointed out that the timing of the rate cut announcement may have a more significant impact on October’s sales figures. Further rate cuts in the future could also have substantial consequences.
While the Greater Toronto Area and Winnipeg saw increased sales, other regions like Calgary, Edmonton, Ottawa, Montreal, and Vancouver experienced declines, contributing to the overall drop in average sales, according to CREA.
Previously, urban centers such as Toronto had lower sales activity compared to smaller cities and rural areas where homes were selling at high rates. Cathcart noted that the shift in September suggests a potential slowdown in these regional trends.
Despite the decline in sales, Cathcart emphasized that the overall picture is not severely affected. Sales remain higher compared to previous years, showing a 5.2% increase from September 2024 and marking the highest number of sales for that month since 2021.
Looking ahead, Cathcart highlighted ongoing challenges in housing supply in Canada. The supply of new homes decreased by 0.8% in September compared to the previous month, with 4.4 months of inventory available (the long-term average being five months).
To address the housing supply issue and prevent rapid price increases due to demand surpassing supply, Cathcart stressed the importance of aggressive housing construction. Urging policymakers in Ottawa to prioritize building, he emphasized the persistent need to tackle the supply shortage promptly.