Canadian home sales recorded their best August in four years, marking five straight months of gains and rising 1.1 per cent from July in what is typically a slower month for real estate.
A total of 40,257 residential properties changed hands across the country as non-seasonally adjusted national home sales rose 1.9 per cent year-over-year in August, the
Canadian Real Estate Association
(CREA) said in its latest housing report.
New listings rose 2.6 per cent month-over-month, outpacing the increase in sales. This lines up with the “huge burst of new supply” that usually hits the market at the end of summer, CREA senior economist Shaun Cathcart told the Financial Post.
“We are predicting another year like last year, where the fall really heats up because we know the demand is out there,” he said. “It should have manifested itself this spring and then, of course, all the tariff chaos and whatnot kept a lot of people on the sidelines. I think pent up demand from the spring could play out here too.”
The bump in new supply caused the national sales-to-new listings ratio to fall for the first time since March, dipping to 51.2 per cent compared to 52 per cent in July. The ratio sits just below the long-term average at 54.9 per cent, but within the range of readings consistent with balanced
housing market
conditions (between 45 per cent and 65 per cent).
Properties listed for sale across all Canadian MLS systems were up 8.8 per cent year over year with 195,453 listings in August, which CREA said is “right in line” with the long-term average for this time of year.
CREA reported 4.4 months of inventory on a national basis at the end of August, the lowest level since January and below the long-term average of five months. Anything below 3.6 months of inventory is considered a seller’s market, while a buyer’s market would be above 6.4 months.
The non-seasonally adjusted national average sale price was up 1.8 per cent year-over-year at $664,078.
CREA said the National Composite MLS Home Price Index changed little between July and August but was down 3.4 per cent in August compared to last year. CREA said it expects year-over-year declines to shrink in the coming months.
“Last year, prices peaked around the summer and then they cooled off quite a bit towards the end of the year. We don’t expect that to repeat this year. If anything, we expect them to keep flat for the next little while,” said Cathcart. “So, just by virtue of what happened last year, those year-over-year comparisons are going to start to look a little bit better.”
After holding its benchmark rate steady at 2.75 per cent in April, June and July, the Bank of Canada is widely expected to issue a rate cut at its next announcement on Sept. 17. Cathcart said the “psychological element” of new listings hitting the market and the possibility of mortgage rates under four per cent could coax buyers off the sidelines.
Economists Tony Stillo and Michael Davenport from Oxford Economics said in a note that two expected 25-basis-point rate cuts from the central bank this year could encourage both sales and listing activity to pick up.
“We expect this will push down house prices slightly, particularly in Toronto and Vancouver, which remain buyers’ markets with ample supply,” Stillo and Davenport wrote.
Even though resale housing activity picked up in August, Stillo and Davenport said the market is still “soft” and they anticipate more price declines this fall.
“While we think house prices will continue sliding lower, the resale housing market will likely find its bottom in early 2026 amid slightly lower rates, improved affordability, and a return to slow but steady growth in household incomes,” they said.
• Email: jswitzer@postmedia.com
Canada's home sales rise nearly 2% for best August in four years: CREA
2025-09-15 13:08:21
