Home sales in Canada in August slowed slightly, recording a 0.7% decrease in July in markets measured by the Canadian Real Estate Association (CREA).
“Sales activity and price trends were largely unchanged for a fourth consecutive month in August,” said Shaun Cathcart, CREA’s senior economist. “What has changed is the broader economic environment, with the Bank of Canada recently warning of rising inflation risks, along with doubts about the durability of recent economic growth."
There are growing changes that will impact markets before the end of the year, added Cathcart.
"For borrowers, fixed mortgage rates have already increased on higher bond yields. Meanwhile, on the variable rate side, a rate hike is not only back on the table for this year but already priced in by markets," he said. "This fresh round of incoming headwinds is expected to dampen the prospects for further housing market momentum heading into 2027.”
The Bank of Canada has two rate announcements on its calendar before the end of this year, Oct. 28 and Dec. 9.
The number of homes listed for sale in August increased 3.3% from July, said CREA Chair Garry Bhaura.
“The noticeable increase in new supply in August was both broad based across all the largest markets and most apparent towards the end of the month," said Bhaura. "This suggests sellers were looking to get an early start to the fall market, particularly given how late Labour Day was this year.”
“For buyers, it will mean the usual seasonal burst of new properties to choose from, but at the same time they also have to contend with a fresh round of economic uncertainty.”
The drop in sales and increase in supply took the national sales-to-new listings ratio to 49.1%, down from 51.1% in July. The long-term average for the national sales-to-new listings ratio of 54.7%, with readings roughly between 45% and 65% generally consistent with balanced housing market conditions.
"There were just under 200,000 properties listed for sale on all Canadian MLS Systems at the end of August, in line with the historical average for that time of the year and just 1.4% above the year earlier level. Overall supply has been more or less sliding sideways since spring 2025," said Cathcart.
"There were 4.8 months of inventory on a national basis at the end of August, unchanged for the fourth consecutive month and slightly below the long-term average for the measure of five months."
"Based on one standard deviation above and below that long-term average, a seller’s market would be below 3.6 months, and a buyer’s market would be above 6.4 months."
The non-seasonally adjusted national average home price was $668,219 in August, up 0.6% year-over-year.
"Prices have remained largely unchanged month-to-month since the spring, marking the longest period of price stability since 2024, when prices were flat throughout the year," said Bhaura. "Year-over-year declines have been shrinking since January, with the August reading marking the smallest decrease since October 2025."