Canadian Analysis

A defining theme this fall is homebuyers’ measured approach despite lower interest rates and growing confidence that worst-case economic scenarios are less likely.

Local markets appear generally softer than last fall. Yet, early results from real estate boards reveal monthly increases in home resales in several key centres.

Vancouver, Fraser Valley, Calgary, Saskatoon, and Montreal experienced notable upticks in home resales in October from September. Edmonton, Regina, Winnipeg, and Toronto, however, recorded modest declines.

Increased inventory provided buyers with more options and greater negotiating power in Ontario, British Columbia, and parts of Alberta. Softening labour markets and persistently poor affordability continued restraining purchases.

In other regions, low supply and rising home values create different barriers for transactions as buyers contend with limited choice, and higher prices.

We anticipate these diverging trends will persist through the remainder of year, and potentially into early 2026.

However, a firmer recovery should gradually emerge as economic momentum builds, and labour market conditions improve—setting the stage for more robust activity ahead.

Toronto area: Stagnant pace

The Toronto area has been stuck in the last three months with home resales close to 25% below pre-pandemic norms. A small 2.3% monthly decline in October entirely offset September’s gain.

Home prices are also in a holding pattern. The composite MLS Home Price Index continues to decline about 5% from a year ago—which has been the case since spring.

The lack of buyer zeal likely reflects a combination of factors including tariff-related economic uncertainty, grimmer job prospects, lower immigration and little urgency to strike deals when inventory is high, and prices decline.

We think recent interest rate cuts will draw buyers from the sidelines, but any recovery is likely to be spotty with poor affordability still a massive obstacle.

An abundance of homes for sale relative to demand is weighing on values. We expect this to continue in the coming months with condo prices facing the strongest downward pressure.

Montreal area: Breaking from the summer lull?

Montreal buyers were more active last month despite fewer sellers putting properties on the market.

We estimate home resales rose more than 5% seasonally adjusted in October from September. This would mark a break from the summer’s constrained activity if sustained.

Low inventory and tight new supply compared to demand maintains strong competition between buyers, fuelling moderate price increases.

Single-detached homes are gaining the most in value with the median price rising 7.3% in the past year. However, condo values are also up, but by a weaker 3.6%.

We expect continuing gradual recovery as lower interest rates, and rebuilding confidence drive demand.

Vancouver area: Fall yet to kick-start market

The overall picture remains cloudy for Vancouver’s market. A pick-up in resales in October—an estimated 7% gain from September seasonally adjusted—only reversed a similar drop the previous month.

Buyers’ struggle with poor affordability is keeping them hesitant to make a move under the current uncertain economic environment.

The inventory of homes for sale is abundant, providing more options and time for buyers to decide. It also bolsters their hand in negotiating prices.

Home values have been declining mildly since the start of this year with October’s MLS HPI down 3.4% from a year ago.

We expect high inventory and the ongoing affordability struggle will drive prices down further in the coming months.

Calgary: Buyers have more options

The Calgary market has been largely flat since summer. We estimate home resales increased nearly 5% last month from September seasonally adjusted, but followed a decline in the previous month.

A flat trend doesn’t mean that activity is weak, though. October resales were more than 40% above pre-pandemic levels.

Declining prices aren’t necessarily a sign of softness either. They’re mainly a result of strong housing construction.

A ramp-up in homebuilding has significantly boosted supply in Calgary, which now looks more balanced with demand. Inventory of homes for sale has climbed to a seven-year high, creating more competition for sellers.

Calgary’s MLS HPI has fallen 4.1% over the past year, and looks set to ease further. A record number of homes under construction will likely continue boosting supply and keep buyers in the driver’s seat for price negotiations.

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Robert Hogue is the Assistant Chief Economist responsible for providing analysis and forecasts on the Canadian housing market and provincial economies.

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