Canada’s housing market took a step back in September, with home sales falling across many major markets as trade tensions with the United States and higher long-term interest rates weighed on buyers.

Sales declined in Vancouver, the Fraser Valley, Calgary, Edmonton, Winnipeg, Hamilton, Kitchener-Waterloo, Toronto, Ottawa, Montreal and Quebec City, according to an analysis by Robert Hogue, assistant chief economist at RBC.

 

 

Prices also continued to fall in Vancouver and the Fraser Valley, while Toronto’s brief improvement over the summer appears to have run its course.

Hogue expects improving affordability and a resilient economy to eventually bring more buyers back into the market and support a mild recovery nationally. But the picture varies considerably from one city to the next.

“The road ahead is likely to be bumpy and uneven across markets,” he wrote.

 

Toronto recovery goes off course

 

Toronto’s tentative recovery lasted five months before sales and prices turned lower again in September.

Resales fell 5.2 per cent from August, while the benchmark price declined 0.5 per cent.

“Confidence had to continue rebuilding for the market healing to progress,” Hogue wrote. “Escalation of the trade war, rise in some interest rates and declining population had a destructive effect.”

One positive is inventory. Active listings were down 9.3 per cent from last year, helped in part by fewer sellers coming to market.

“Inventory must stay on a declining trend for home values to eventually stabilize,” wrote Hogue.

Condos remain a weak spot, however, accounting for nearly one-third of listings. Condo prices were down 6.7 per cent year over year, compared with a 4.7 per cent decline for single-detached homes.

 

Montreal supply keeps growing

 

Montreal’s housing market story is increasingly about the supply level.

Inventory was up 20 per cent from a year ago, while new listings increased 7.2 per cent in September. More than 24,000 new homes were completed over the previous 12 months, which Hogue said has created “a certain displacement effect in the market.”

The biggest increases in inventory have come on the North and South Shores, where active listings were up 30 per cent and 32 per cent, respectively.

That added supply is taking some steam out of price growth. Median condo prices were flat year over year, while single-family prices increased just 0.4 per cent.

 

Vancouver’s slump continues

 

There was little relief in Vancouver in September.

Resales fell nearly eight per cent from August on a seasonally adjusted basis, while the composite MLS Home Price Index was down 5.5 per cent from a year ago.

Hogue said affordability and confidence remain significant barriers and price declines so far haven’t been enough to bring buyers back in a sustained way.

“Further depreciation will likely be necessary to draw in more buyers,” he wrote.

With active listings still near a decade high, RBC expects prices to remain under pressure through the rest of this year and potentially into 2027.

 

Calgary stays relatively steady

 

Calgary continued to hold up better than several other major markets.

Transactions, new and active listings and the MLS Home Price Index were all little changed from August after adjusting for seasonality, while sales remained historically strong despite sitting below last year’s levels.

There was a sizeable divide by housing type. Single-detached resales were up 4.4 per cent year over year, while prices slipped one per cent.

Condo resales, meanwhile, fell 14.3 per cent from last year and prices were down 8.3 per cent.