Canadian Housing Market Shows Signs of Gradual Recovery

The Canadian housing market is showing signs of recovery, according to the Bank of Canada and industry reports. In its September rate announcement, the Bank noted a rebound in housing activity, citing sales data that showed a steady increase from May to August.

National home sales rose 5.5% in May, followed by gains of 0.5% in June and July before edging down 0.7% in August, according to the Canadian Real Estate Association (CREA). The national benchmark home price was unchanged from July to August and down 3% year over year, marking the smallest annual decline since October 2025.

The REMAX Hot Pocket Communities Report found that detached-home sales increased year over year in 61% of 83 markets across the GTA, Greater Vancouver, and the Fraser Valley. However, values rose in only 6% of those markets. The report credits sharper pricing and a narrowing gap between what buyers offer and what sellers ask for with pulling buyers back into the market.

The recovery is gradual and uneven, with some markets showing stronger sales and prices than others. CREA reported a national sales-to-new listings ratio of 49.1% in August and 4.8 months of inventory, both within the range considered balanced. However, higher fixed mortgage rates and the possibility of a future Bank of Canada rate hike could slow further market momentum.