Canada's Housing Market Faces 'Bleak Autumn' of Declining Prices and Reversing Momentum

Canada's housing market is facing a 'bleak autumn' of declining prices and reversing momentum, economists say.

The latest Canadian Real Estate Association (CREA) data shows that home sales fell 0.7 percent in August from July, while prices remained flat.

Ariane Curtis, North America economist at Capital Economics Ltd., expects house prices to fall a bit further in the coming months and is now calling for home prices to remain flat for 2027 instead of rising by one percent as previously forecasted.

Capital's previous prediction was that prices would rise three percent in 2028, but Curtis says this will still happen.

Daren King, an economist at National Bank of Canada, believes the decline in sales in August reflects a slowdown caused by uncertainty due to the trade dispute with the United States.

The rising bond yields are also being blamed for stifling the housing rebound. The rate on U.S. Treasuries has pushed past five percent to the highest level since 2007.