Canadian home sales slumped in September for 1st time since April

The number of homes sold in September dipped by 1.7 per cent compared to the previous month, breaking a five-month streak of increased sales activity, according to new data from the Canadian Real Estate Association (CREA).

There were 39,938 residential properties sold across the country last month, down from 40,615 sales in August.

The benchmark home price ticked down 0.1 per cent month over month and down 3.4 per cent year over year. The national average price of a home was $676,154 for the month.

The drop in sales came despite an interest rate cut in September by the Bank of Canada, from 2.75 to 2.5 per cent.

CREA senior economist Shaun Cathcart said the expectation for a rate cut wasn’t clear until the “eleventh hour,” which could mean it will have more of an impact in October’s sales figures. If the central bank chooses to cut rates further in the coming months, he says that will also have a big impact down the road.

Regionally, the Greater Toronto Area and Winnipeg saw increased sales — but dips in Calgary, Edmonton, Ottawa, Montreal and the Vancouver area were enough to pull the average down, according to CREA.

Before now, city centres including Toronto had been lagging in terms of sales activity, whereas homes in smaller cities and rural areas had been selling lots of homes at sometimes record prices, according to Cathcart. He says this September change indicates that those regional trends might be slowing down.

But Cathcart says the drop isn’t all that drastic in the grand scheme of things. Sales are still up compared to previous years — 5.2 per cent higher than September 2024, and the highest number of sales for the month of September since 2021.

“Things don't always go up in a straight line forever. So I'd be more inclined to call this a bump in the road at this point,” Cathcart said.

In the long run, Cathcart says Canada still faces challenges when it comes to housing supply. The supply of new homes dropped 0.8 per cent in September compared to the previous month, according to the new data, while there are 4.4 months of inventory available in total (the long-term average for that benchmark is five months).

Cathcart says that means Canada needs to keep building housing aggressively in order to avoid a situation where prices increase rapidly because there’s not enough housing to meet demand.

“Our message to policymakers in Ottawa is get building sooner than later, because this shortage-of-supply situation hasn't gone anywhere."