The Canadian Real Estate Association (CREA) has adjusted its 2026 home sales forecast downwards for the third time this year, as September saw a decline in sales nationwide. Initially predicting a slight increase in home sales for 2026, CREA now anticipates 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 impact on bond yields and subsequently fixed mortgage rates, according to CREA, which has influenced the market negatively. While there was a slight uptick in monthly activity over the summer, CREA’s senior economist, Shaun Cathcart, attributes the expected slowdown in homebuyer activity towards the end of the year to rising oil prices once more and the growing concern that the Bank of Canada may raise interest rates to combat inflation.
Cathcart mentioned that factors like U.S. tariffs and increasing lending rates have created uncertainty in the market for the past two years, leading many potential buyers to hold off on making decisions. Real estate company Royal LePage also noted a cautious sentiment among buyers due to global uncertainties, impacting the fall housing market.
September witnessed a decline in home sales, with figures down by 2.3% compared to August and 7.7% compared to the same period last year. Additionally, the number of newly listed properties dropped by 1.8% on a month-over-month basis. The average national home price stood at $666,538, reflecting a 1.6% decrease compared to the previous year.
Regional markets in Vancouver and Toronto showed particular weakness in September, while markets in the Prairies, Quebec, and the East Coast, which had been strong for some time, also started to cool down. Despite the current forecast downgrade, CREA foresees a rebound in home sales next year, projecting a 4.4% increase in 2027 under the assumption of minimal rate adjustments by the Bank of Canada and increased borrower confidence in lending rates.