Canadian home sales slowed in September, first decline since March

September's overall supply was up 7.5 per cent from a year earlier, with 199,772 properties listed for sale at the end of the month. Photo by Peter J. Thompson/National Post

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The number of homes sold nationally dropped by 1.7 per cent in September compared to August, the first month-over-month decline since March, according to the Canadian Real Estate Association (CREA)’s monthly data released on Oct. 16.

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CREA said the monthly decline was the result of lower sales activity in Greater Vancouver, Calgary, Edmonton, Ottawa and Montreal, which more than offset gains in the Greater Toronto Area and Winnipeg.

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In an interview, CREA’s senior economist, Shaun Cathcart, said that September’s home sales were still “relatively unchanged” and “sort of similar” to August’s numbers.

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“It’s not a trend yet, maybe a bit of a bump in the road,” he said.

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Cathcart said there may be a lag in the impact of September’s mid-month interest rate cut on homebuyers, which could instead cause more activity in October.

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He added that this was the case last year, when October was the surprise month for homebuying activity and the market sprang to life.

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Similarly, Desjardins economist Kari Norman said the Bank of Canada lowering its policy rate by 25 basis points to 2.50 per cent in September had limited impact on home sales given the mid-month timing.

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In a note following the release of the CREA report, Norman said she doesn’t anticipate a wave of forced home sales from mortgage renewals at higher rates, though this could vary by region.

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Looking ahead, Norman expects another 25-basis-point rate cut later this month, followed by one more to support economic activity.

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CREA noted that while the trend of rising sales that began earlier this year took a breather in September, the number of sales were the highest recorded for that month since 2021.

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“This recovery that we’ve been waiting so long for, that we thought was going to happen this spring but got sideswiped by tariffs, really does seem to be underway now,” said Cathcart.

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September’s overall supply was up 7.5 per cent from a year earlier, with 199,772 properties listed for sale at the end of the month. Cathcart said this is one of the smallest year-over-year increases in a long time.

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The number of newly listed properties edged down 0.8 per cent in September compared to the previous month.

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With the slightly larger decline in sales activity, the sales-to-new-listings ratio eased slightly to 50.7 per cent compared to 51.2 per cent in August.

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“While there are more buyers in the market now than at almost any other point in the last four years, sales activity is still below average and well below where the long-term trend suggests it should be,” CREA chair, Valérie Paquin, said in a press release. “As such, we expect things will continue to steadily pick up going forward.”

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CREA also released on Thursday an update to its resale housing forecasts for 2025 and 2026.

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“It’s a situation where if sales continue to rise and supply continues to fall on a month over month basis, we could be back reporting some pretty tight market conditions by early next year,” said Cathcart.