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Canada’s housing market finds its footing with five straight months of sales growth, rising inventory, stable prices, and cautious optimism for the fall
The Canadian housing market continued its late spring rebound through August, with national home sales rising 1.1% compared to July. This marks the fifth straight month of increasing activity and adds up to a 12.5% gain in transactions since the slowdown in March. August also delivered the strongest sales result for this time of year since 2021. Compared to last year, actual sales were up 1.9%, showing a modest improvement over August 2024.
Sales Up Nationally, Led by Montreal and Vancouver
According to the Canadian Real Estate Association, much of the growth came from Montreal, Greater Vancouver, and Ottawa. These gains were enough to offset a small decline in the Greater Toronto Area. Toronto has been the main driver of national sales increases for much of the year, so a brief pause is not unexpected. The encouraging sign is that other major cities are now picking up steam.
“This five-month upswing in sales is giving buyers and sellers new confidence heading into the fall,” noted Karim Kennedy, Chief Executive Officer of Coldwell Banker Canada. “We are seeing strong momentum in markets like Montreal and Vancouver, showing that the recovery isn’t limited to one region. Canadians are adjusting to the current interest rate environment, and our Coldwell Banker agents are helping clients navigate these opportunities with confidence.”
Overall, activity has been steadily gaining strength since the spring. Many buyers who had been waiting on the sidelines during the quieter winter and early spring are gradually returning to the market.
More Sellers Return as New Listings Rise
Sellers have responded to the uptick in sales by listing more homes. Nearly 76,000 properties came onto the market in August, a 2.6% increase from July and about 6% higher than a year ago. Because new supply rose faster than sales, the sales-to-new-listings ratio eased slightly to 51.2% compared to 52% in July.
That ratio means roughly half of all new listings are selling, a sign of balanced conditions. Buyers have more choice than they did in the spring, while demand remains strong enough to keep pace.
Inventory Lowest Since January, Yet Balanced
At the end of August, Canada had 4.4 months of inventory on the market. That is the lowest level since January, but still within normal ranges for this time of year.
“Even with inventory at its lowest level in months, there’s still enough supply to keep the market healthy and avoid runaway price pressure,” observed Hashim Arthur, Chief Operating Officer of Coldwell Banker Canada. “Conditions are balanced, which is a good place to be. Buyers have more selection than they did earlier in the year, and sellers who price their homes appropriately are still finding strong interest.”
In total, there were about 195,000 properties listed for sale across the country at the end of August. That is almost 9% higher than a year ago and is in line with historical norms for this time of year. The overall supply picture has returned to a more typical state after years of tight conditions, which has prevented the extreme seller’s markets seen in the past.
Home Prices Holding Steady
Despite rising sales, prices have been largely flat. The MLS Home Price Index, which measures the benchmark value of a typical home, slipped by just 0.1% from July. It remains about 3.4% lower than last August, reflecting the declines seen in late 2024 and early 2025 when the market adjusted to higher borrowing costs.
Since April, however, prices have held steady. The national average sale price in August was about $664,000, up 1.8% compared to August 2024. That was the first annual increase in several months and suggests that values are stabilizing, with modest gains showing up in some regions. Year-over-year comparisons are expected to keep improving this fall as the market moves past last year’s lows.
Price patterns vary by region. Higher-priced markets such as Toronto and Vancouver went through deeper corrections last year and are now stabilizing. More affordable markets are beginning to see small increases as activity picks up. The overall message is that prices are no longer falling, but they are not surging either. Buyers are not facing the rapid increases seen during the pandemic, while sellers are generally not under pressure to discount heavily.
What to Watch This Fall
As summer wraps up, attention turns to the fall market, which is traditionally one of the busiest times of the year. Two factors will be key. The first is the surge in new listings after Labour Day, which has already begun. The second is the Bank of Canada’s next interest rate decision. Even a modest rate cut could bring more buyers back into the market.
“We anticipate that if borrowing costs ease even slightly, it will encourage a wave of buyers who have been waiting for a better entry point,” Arthur explained. “Our agents are already seeing more inquiries from clients who are watching mortgage rates closely. With additional listings coming on and a possible rate adjustment ahead, the fall could be a very active season. Buyers who are ready with financing in place will be in a strong position to act quickly when they see the right home.”
Kennedy added, “A balanced market is good news. Buyers have more choice, sellers have realistic expectations, and transactions are happening at a healthy pace. As we head into the fall, preparation and timing will be key. Those who are ready to move will be best positioned to take advantage of opportunities as they arise.”
