The Canadian Real Estate Association (CREA) has adjusted its forecast for 2026 home sales downwards for the third time this year, with September data indicating a decline in sales nationwide. Initially anticipating a slight increase in home sales for 2026, CREA now projects a 5.2% decrease in home transactions compared to the previous year. This revision follows similar adjustments made in April and July.
The surge in oil prices since spring has led to an increase in bond yields and subsequently fixed mortgage rates, impacting the housing market, according to CREA. While there was a slight uptick in monthly activity over the summer, CREA’s senior economist, Shaun Cathcart, anticipates that rising oil prices and concerns about potential interest rate hikes by the Bank of Canada to combat inflation will deter more potential homebuyers from entering the market in the final months of the year.
Phil Soper, President and CEO of Royal LePage, echoes similar sentiments, noting that the fall housing market has been softer than expected as buyers exercise caution amid global uncertainties and the unpredictable rhetoric from Washington.
September witnessed a decline in home sales, with figures showing a 2.3% drop compared to August and a 7.7% decrease from the previous September. Additionally, the number of newly listed properties decreased by 1.8% month-over-month, with new supply trends declining since September 2025.
The average national home price stood at $666,538, marking a 1.6% decrease from the previous year. While markets in Vancouver and Toronto exhibited weakness in September, regions like the Prairies, Quebec, and the East Coast, which had been experiencing robust activity, have also started to cool down.
Looking ahead, CREA anticipates a recovery in home sales next year under an optimistic scenario where the Bank of Canada implements limited rate adjustments and borrowers gain more clarity on lending rates. The forecast predicts a 4.4% increase in home sales for 2027.
