Canadian Housing Market Update: September 2025

When tariffs on Canadian goods increased to 35% on August 1, there was fear that the renewed sense of uncertainty might derail the housing market’s shaky recovery.

Not so. August delivered a fifth consecutive month of increased home sales.

It wasn’t much of a jump; sales were just 1.1% higher than in July. But considering the roadblocks many buyers face — deteriorating savings, rising debt, stubbornly high home prices — a gradual improvement is nothing to sneeze at.

Home buyers who came to the market in August generally found stable conditions.

New listings were up 2.6% from July, outpacing the increase in sales and pushing the sales-to-new listings ratio down to 51.2%. (A ratio between 45% and 65% typically indicates a balanced market, according to the Canadian Real Estate Association.)

And at the end of the month, active listings sat at over 195,000, up almost 9% from a year ago. Buyers in September should have plenty of properties to choose from.

The favourable supply conditions in August also helped keep a lid on home prices. CREA’s National Composite MLS Home Price Index, its preferred measure of price activity, was flat from July to August. The national benchmark price, $687,300, was 3.5% lower than a year ago.

Will the market keep chugging along now that the economy’s running out of gas? We’ll get to that in a second.

First, let’s see how sales and prices behaved in some regional housing markets.

August housing market winners and losers

Canada’s housing rebound has been somewhat uneven. That trend continued in August, with six provinces posting monthly increases in home sales:

The gains were modest. Newfoundland’s, for example, works out to just 50 additional sales. The biggest monthly increase was in Quebec, where there were just over 300 additional sales.

Sales declines in August didn’t amount to much, either:

Sales in New Brunswick were decreased by less than 120 compared to July. They were down by less than 70 in Saskatchewan. And a virtually flat month in tariff-rattled Ontario is nothing to worry about.

None of these figures provide any reason to panic. Dwindling activity in Saskatchewan, New Brunswick and Manitoba might indicate that affordability pressures have finally caught up to the country’s least expensive markets.

That wouldn’t be ideal, but since it’s a predictable outcome at a time when the cost of living has no chill, it’s not exactly frightening.

Canadian home prices in August

Aside from outliers like Saskatoon, Quebec City and Sherbrooke, where the average sale price rose by at least 7.5% since July, price shifts in most cities were moderate.

Here’s how average sale prices behaved in some of Canada’s biggest housing markets. All percentages are month-over-month changes.

What we see here is the ebb and flow of a reasonable housing market: no painful spikes, no nauseating drop-offs. It’s the kind of easygoing, well-supplied market many Canadian buyers have been waiting for.

And it just became even more enticing.

What’s next?

If you’re a housing geek, real estate professional or hoping to sell your current home, the next few weeks should get your blood pumping.

The Bank of Canada’s latest rate cut, handed down on September 17, lopped 25 basis points off of variable mortgage rates, opening the door a little further for buyers struggling to get approved for a mortgage. Variables are still well over 4% at the Big Six, but some national mortgage brokers are offering five-year variable rates for around 3.6%.

With government bond yields trending down for most of the month, lenders are in a position to improve their fixed-rate offers, too.

Now for the drama: A concurrent decrease in fixed and variable mortgage rates is generally a sign of a wobbly economy.

Canada’s gross domestic product shrank in the second quarter of 2025, and unemployment crept up to 7.1% in August — not exactly the ideal backdrop for a rousing fall market.

Canadian home buyers have been shrugging off economic uncertainty for most of the year, so it’s entirely possible that sales continue to increase as we move into the final three months of the year. Sub-4% mortgage rates don’t hurt, either.

But if unemployment keeps rising, and buyers get spooked by the prospect of a recession, they’ll sit on their down payments until the coast is clear.