Cautious buyers and uneven regional trends kept Canada’s housing market in low gear this September
Canada’s housing market kicked off the fall season on a muted note, with early September data revealing a patchwork of regional trends and persistent caution among buyers.
The latest analysis from Royal Bank of Canada’s Robert Hogue, Assistant Chief Economist, points to a market still searching for solid footing after months of uncertainty.
“Purchasing urgency remained largely absent despite growing confidence among buyers as worst-case economic scenarios appeared more unlikely,” Hogue said.
"In Ontario, British Columbia, and parts of Alberta, expanded inventory levels are providing buyers with wider selection and stronger negotiating positions. The prospect of further price declines also sets up a wait-and-see approach."
Anne-Elise Cugliari Allegritti (Royal LePage) noted first-time buyers feel no urgency due to market opportunity and falling rates.https://t.co/4UYoobuBJT
— Canadian Mortgage Professional Magazine (@CMPmagazine) September 29, 2025
September brought modest improvements in home resales in Winnipeg, Regina, and Toronto, but most major centres, including Vancouver, Calgary, Edmonton, Saskatoon, Hamilton, Ottawa, Montreal, and Halifax, saw slight declines.
Persistent affordability challenges and a softening labour market continued to constrain household purchasing power nationwide. In regions where supply remained tight and home values appreciated, activity stayed subdued for different reasons—limited options and slowly improving affordability.
Toronto: Buyers gain leverage as prices ease
In Toronto, decades-high inventory sustained strong competition between sellers and pushed home values lower. The city’s MLS Home Price Index dropped for the tenth time in 11 months to $971,500 in September, down 0.5% from August and 5.5% year-over-year.
“It has now dropped more than $320,000 since the market’s peak in early 2022—bringing some affordability relief,” Hogue said. Still, he flagged that the correction only partially reversed the 63% surge during the pandemic, and affordability remains a major hurdle for many.
“Buyers have the upper hand in the Toronto area when negotiating prices,” Hogue said. “Easing prices support a recovery from exceptionally low transactions this winter and spring.”
Montreal: Slow pace, tight supply
Montreal’s market changed little over the summer, with tight supply restraining resale recovery and prices on a moderate upward path. “We see this driving prices higher in coming months with single-family homes likely to exhibit the most heat,” Hogue said.
The median price for single-family homes rose 7.2% in the past year, double the 3.6% gain for condos.
Vancouver: Affordability remains a hurdle
Vancouver continued its recovery but struggled with soft activity and declining values. “Vancouver, by far, remains the least affordable market in Canada despite falling home values,” Hogue said. “We see severe affordability challenges significantly constraining buyers’ ability to bid higher for some time to come.”
The city’s benchmark price dropped 3.2% year-over-year to $1.14 million, and inventory levels hit decade highs.
In Calgary, a slight monthly dip in transactions underscored an uneven path forward. “Buyers feel less urgency to make purchasing decisions when they have more options,” Hogue said, pointing to a seven-year high in inventory and a 4% annual drop in the MLS HPI. “Time is on buyers’ side as prices continue to drift lower.”
The diverging regional trends are expected to persist through the rest of fall and into early 2026. However, Hogue anticipates recovery as economic momentum builds and employment conditions stabilize.
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