Some sellers aren’t willing to bring their listed price lower – potentially keeping properties sitting on the market for longer
Canada’s fall housing market is off to a quiet start, described last week as “low-key” by Royal Bank of Canada (RBC) in a new analysis.
Home resales crept slightly upwards across some cities but fell in most, even despite lower prices and falling interest rates in recent months.
Some buyers, RBC suggested, are holding off on entering the market because they’re waiting for prices to drop even more, while others are still struggling with affordability and keeping an eye on the stormy economy.
But there’s also a cohort of sellers keeping market activity muted, according to Mortgage Wellness broker Nick Lecuyer (pictured top): namely, those who aren’t desperate to sell and are unwilling to consider slashing their listed price despite lack of buyer interest.
“In a lot of circumstances, we’re seeing people just not being OK with accepting the current value of their home,” he told Canadian Mortgage Professional.
Robert Hogue, RBC Assistant Chief Economist, says Canada’s fall housing market shows mixed trends, with buyers gaining leverage in Toronto, tight supply in Montreal, and affordability hurdles in Vancouver.https://t.co/VJaV9SUDhf
— Canadian Mortgage Professional Magazine (@CMPmagazine) October 9, 2025
Are sellers being realistic about the market?
Property values soared during the COVID-19 pandemic in many markets – including Ontario’s Greater Golden Horseshoe – amid a purchasing boom.
That growth has since tapered off, with plenty of regions also seeing prices slide as potential buyers step to the sidelines. Still, some sellers are in no rush to strike a deal for their home, preferring to keep it listed at their original valuation without offering a discount.
“They’ll either try and list it high and it’ll sit on the market and they get frustrated, or they’re just going to hang onto it in the meantime,” Lecuyer said. “And I would say that’s a dangerous thing because we don’t know how much inventory is going to hit the market at any given time.”
That trend of unmotivated sellers could be giving a false sense of how much supply is actually available, according to Lecuyer.
“They say there’s seven months of inventory on the market,” he said. “I always question that and say, ‘How much of that is really serious sellers that are looking to sell? Is it more four to five months of serious inventory on the market, and three months of people that just have unrealistic price expectations?’
“I don’t think it’s seven months of inventory on the market with very motivated sellers. That just isn’t the case.”
That tepid start to the fall market has pushed a hoped-for housing recovery in Canada even further into the future.
When will Canada’s housing market gather pace?
RBC sees little chance of a national bounce in activity anytime soon, with “diverging regional trends” likely to persist until the beginning of next year.
If the economy stabilizes and labour market prospects improve, that could eventually jolt the market into life, the bank said.
Lecuyer said it’ll take time for the market to rev up again – and lower mortgage rates, with the Bank of Canada expected to launch further cuts in the months ahead.
When the bottom end of the market – first-time buyers and younger Canadians – start to purchase when rates hit a sweet spot in the mid-threes, that could stir further confidence and bring more sellers into play.
“If those people start entering the market and selling and buying, then all of a sudden there’s sales growth,” Lecuyer said. “Once there’s affordability and sales growth, the next thing down the conveyor belt is price growth.”
The good news is that for Canadians who now find themselves in a position to buy, it’s a solid time to enter the market – as long as they’re purchasing a home to live in, rather than for investment purposes.
“That same townhouse that was $800,000 is now $600,000,” Lecuyer said. “And because it’s $600,000, they can also get an interest rate that’s reasonable. It’s not 2%, but it’s not 4% either.
“Those numbers start to make sense for people. They go out and look at a $600,000 home and they get it for $550,000 whereas when they used to look at the $800,000 home, they had to pay $850,000. So it’s really changed quite drastically.”
Make sure to get all the latest news to your inbox on Canada’s mortgage and housing markets by signing up for our free daily newsletter here.
