With the strongest September sales numbers for four years, the real estate market has started its fall season with a sense of optimism.
While many headlines have pointed to deals dipping 1.7% compared with August, the reality is that our market is susceptible to the occasional surprise.
Lower sales numbers were recorded in the key markets of Vancouver, Ottawa, Calgary and Edmonton.
The Royal Bank of Canada (RBC) said a 0.8% drop in new listings in September from August might have contributed to the slower pace of September sales.
Property market recoveries are rarely smooth. There will always be the occasional monthly set of data that shows confidence has not been completely restored.
However, there’s no doubt Canadians are increasingly feeling better about the prospects for property.
The senior economist at the Canadian Real Estate Association (CREA), Shaun Cathcart, summed up the situation, saying: “While the trend of rising sales that began earlier this year took a breather in September, activity was still running at the highest level for that month since 2021, and that was true in July and August as well.
“With three years of pent-up demand still out there, and more normal interest rates finally here, the forecast continues to be for further upward momentum in home sales over the final quarter of the year and into 2026.”
The Bank of Canada’s decision to reduce the benchmark interest rate to 2.5% in September has helped encourage more buyers from the sidelines. However, the recovery still has fragile elements.
Home prices continued to drop in Ontario and in those parts of B.C., where there are more properties than buyers and higher prices test affordability.
There is no such problem for the Prairies, Quebec and Atlantic Canada, where values continue to recover.
The RBC, in its market analysis, expects resales to continue to recover gradually “as lower interest rates, and in some markets, lower prices, stimulate buyer demand”.
“The process is unlikely to be smooth with persisting economic uncertainty, labour market softness and affordability issues poised to create waves. September’s setback serves as a reminder that the housing market recovery remains vulnerable to external shocks and shifts in sentiment.”
The recent 10% increase in tariffs by the US (because an advertisement featuring footage of the late US president Ronald Reagan talking about the folly of tariffs) is an example of what we’re having to deal with currently.