After months of steady progress, Canada’s housing market finally took a breather in September. According to new data from the Canadian Real Estate Association (CREA), home sales slipped by 1.7 per cent compared with August the first monthly decline since April. On the surface, that might sound discouraging. But when you dig deeper, the story isn’t nearly as bleak.
In fact, September turned out to be the strongest one for home sales since 2021. As CREA’s senior economist Shaun Cathcart pointed out, activity remains “at the highest level for that month since 2021,” continuing the upward trend seen through July and August. So yes, the market cooled slightly but it’s cooling after a strong summer run.
The pullback came mostly from five of the country’s largest markets: Greater Vancouver, Calgary, Edmonton, Ottawa and Montreal. Interestingly, Toronto and Winnipeg bucked the trend, posting modest gains. This mix of results highlights what many economists have been saying for months Canada’s housing recovery is “uneven and fragile.”
Royal Bank of Canada recently used those very words, noting that while the housing market is crawling back from its post-pandemic slump, it’s doing so unevenly across regions. Meanwhile, Royal LePage remains optimistic, projecting a full recovery by 2026.
And there are good reasons for that optimism. CREA expects stronger sales through the final months of 2025, fueled by what Cathcart calls “three years of pent-up demand” and “more normal interest rates.” After years of rate hikes and affordability anxiety, even a modest easing in borrowing costs seems to be reigniting buyer confidence.
Still, not everyone is cheering. Clay Jarvis of NerdWallet Canada called September’s slowdown “a disappointment,” especially since the Bank of Canada’s mid-month rate adjustment gave buyers a little more breathing room. Yet, he also acknowledged that when you zoom out, the bigger picture looks better: home sales are up 5.2 per cent compared to September of last year. “You could consider any rise in sales a win,” he said and given the economic uncertainty buyers are facing, he’s probably right.
CREA’s report also paints a cautiously hopeful outlook. The organization predicts 473,093 residential properties will change hands this year only a slight dip from 2024 with prices averaging $676,705, down 1.4 per cent. The declines are mostly concentrated in British Columbia and Ontario, two provinces that have long carried the weight of Canada’s affordability crisis.
But the real optimism lies in the forecast for 2026, when CREA expects home sales to jump 7.7 per cent and average prices to climb 3.2 per cent to nearly $699,000. If that happens, it would mark the strongest housing year since 2021.
There’s another encouraging sign: housing construction is picking up. The Canada Mortgage and Housing Corporation (CMHC) reported a 14 per cent jump in housing starts in September compared to August, driven mainly by rental projects in Toronto and Montreal. This suggests developers are still betting on long-term demand, even if today’s confidence feels a bit shaky.
It’s true that September’s numbers might look like a stumble. But the market’s fundamentals steady demand, easing rates, and improving construction hint that the comeback is only paused, not derailed. Canada’s housing story isn’t about sudden booms anymore; it’s about cautious, gradual recovery.
And after the rollercoaster of the past few years, maybe that’s exactly what the market needs.
