Houses for sale And prices fell in October compared to the same period last year, but increased compared to September, as Canadian Housing Market continues to gradually recover from the shocks caused by the trade war in early 2025. Canadian Real Estate Association (CREA) reported Monday.
In its latest housing market report, CREA said 42,068 homes changed hands nationwide in October, up 0.9 percent from the previous month but down 4.3 percent from last year.
Sean Cathcart, senior economist at CREA, said sales activity is “moving in the right direction,” albeit slowly due to ongoing economic uncertainty surrounding tariffs.
“The market has really come to life Last October in this very narrow window of time between rates falling, but we weren't in a trade war yet. So we're a little behind that,” he said. “But overall, compared to the beginning of this year, the situation is developing steadily.”
The national non-seasonally adjusted average sales price was up 0.2 percent from September but down 1.1 percent year-over-year to $690,195.
The non-seasonally adjusted MLS National Home Price Index fell three percent in October from a year ago, which CREA noted was the smallest year-over-year decline since March.
Cathcart said home prices were down year-over-year due to weakness in the first quarter of 2025, when “the initial tariff shock spooked everyone and pulled the rug out from under the spring market.” However, he noted that prices are no longer falling.
“I think once we get through the winter and start next year, you'll see the year-over-year decline taper off,” Cathcart said. “We might even get back into positive territory because I don’t see prices falling further at the moment as buyers return to the market.”
Properties listed for sale across all Canadian MLS systems were up 7.2% year over year, with 189,000 properties sold in October, which CREA said is “very close” to the long-term average for this time of year.
CREA reported 79,225 new properties came on the market last month, down 1.4 percent from September. The association said fewer listings and increased sales activity “tightened” the sales-to-new listings ratio in October to 52.2 percent, up from 51 percent the month earlier.
That ratio is below the long-term average of 54.9 percent, with “readings between approximately 45 and 65 percent generally consistent with balanced housing market conditions,” CREA said.
CREA said inventories were “virtually unchanged” from July, August and September at 4.4 months of inventory nationally at the end of October. — That's the lowest level since January and below the long-term five-month average. Anything with less than 3.6 months of inventory is considered a seller's market, while inventory with a shelf life of 6.4 months or more is considered a buyer's market.
Despite concerns about broader economic uncertainty and job security holding back the real estate market, the fact that Canada has a chronic housing shortage relative to its population continues to drive demand, said Don Kottick, president of real estate brokerage REMAX Canada.
“There is a significant portion of the population that will have to move for life reasons, whether it be divorce, the need to downsize, or the need to expand as their families grow,” he said. “So this pent-up demand isn't going to go away, and it's just a question of when it will break.”
Kottick said accessibility is still a major issue For home buyersand the combination of lower prices in many regions and lower interest rates could boost activity in 2026.
Since January, the Bank of Canada has cut its benchmark interest rate, which currently stands at 2.25 percent.
Cathcart said many Canadians may have been hesitant to commit to a five-year fixed rate – most popular mortgage term — when they thought interest rates were still falling, but may have changed their minds after the central bank signaled in its latest decision on October 29 that this could be done through easing.
“I think it could really attract a lot of outside buyers,” he said. “But the only question is whether it will happen in the winter, which is usually slower, or whether we will have to wait until next spring.”
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