Sellers holding out for a robust fall real estate market have been handed another dose of reality, as the Canadian Real Estate Association (CREA) aggressively trims its multi-year outlook. In its latest market update, CREA revealed it has stripped 18,806 sales from its 2026 forecast since July, reflecting a persistent slowdown across major housing markets driven by tightening buyer budgets and elevated borrowing costs.
The national real estate association now anticipates a total of 444,530 residential property sales nationwide in 2026, representing a 5.2 per cent decline compared to the final tally projected for 2025. This downward revision underscores the ongoing strain on housing demand, which has failed to match the optimistic momentum anticipated by some market participants earlier in the year.
The most recent monthly data illustrates the underlying friction. National home sales fell 2.3 per cent in September compared to August on a seasonally adjusted basis, while new residential listings retreated by 1.8 per cent over the same period. Crucially for market dynamics, the housing sector lost prospective buyers at a faster pace than it shed new supply, preventing any meaningful tightening of inventory that might otherwise have supported prices.
Price metrics are beginning to reflect this imbalance. Following four months of relative stability, the national benchmark price slipped 0.4 per cent in September. On an unadjusted basis, the benchmark sat 3.4 per cent below the levels recorded in September of the previous year, while the average national sale price dropped 1.6 per cent annually down to $666,538.
For real estate professionals, these shifts require a recalibration of pricing strategies. While a seller might point to a comparable property that commanded a strong price during the summer months, prospective buyers must finance their acquisitions at current interest rates. Agents defending ambitious, above-market asking prices are finding that they must explicitly account for how much a buyer’s purchasing power has eroded since those summer benchmarks were established.
Balanced, with fewer buyers
Despite the downward pressure on transaction volumes and a cooling price environment, the national market is technically maintaining a state of balance—though it is a balance defined by subdued activity rather than vibrant competition.
Canada’s national sales-to-new-listings ratio eased slightly to 48.8 per cent in September, down from 49.1 per cent in August. This figure remains comfortably within CREA’s historical balanced market range of roughly 45 to 65 per cent, yet it sits well below the long-term national average of 54.7 per cent.
Inventory levels remain relatively measured rather than overwhelming. At the close of September, slightly more than 200,000 homes were actively listed across the country, marking a modest 1.8 per cent increase on an annual basis. Seasonally adjusted months of inventory edged up to 4.9 months, hovering close to historical norms. This dynamic highlights a sluggish national market that is weighed down by a lack of momentum rather than being flooded by an exceptional surplus of emergency listings.
However, a smaller active pool of buyers leaves overpriced properties with very few opportunities to attract someone willing to stretch their budget. While dedicated sellers can theoretically choose to hold out for their initial price expectations, the carrying costs—including monthly mortgage payments, escalating property taxes, and ongoing maintenance bills—continue to accumulate.
Industry experts suggest that listing presentations must be grounded in current realities. A comprehensive pricing strategy should begin by analyzing direct local competition, recent transactions that successfully closed, and the tangible carrying costs the seller will incur by waiting. Relying on a national forecast that predicts flat or stable prices provides very thin support for an asking price that local, rate-constrained buyers are actively rejecting.
Ontario has less room for optimism
Regional divergences remain a prominent feature of the Canadian housing landscape, with Ontario continuing to exhibit some of the softest conditions in the country.
When examining provincial sales-to-new-listings ratios for September on a seasonally adjusted basis, Ontario lagged significantly at 41.9 per cent. By comparison, British Columbia recorded a ratio of 43.9 per cent, Alberta stood at a much healthier 57.6 per cent, and Manitoba led major provinces at 64.4 per cent. These figures illustrate vastly different levels of competitive pressure across provincial borders.
Ontario’s ratio barely budged from August’s mark of 41.8 per cent, cementing an environment that was already characterized by weak demand. The continuation of high borrowing costs throughout September triggered further price erosions across several key Ontario submarkets.
According to CREA’s seasonally adjusted composite metrics, benchmark prices fell across several major urban centers in September, declining by 0.5 per cent in the Greater Toronto Area, 0.8 per cent in Mississauga, 1.2 per cent in the Hamilton-Burlington region, and 1.5 per cent in Ottawa. Conversely, select regions such as Kitchener-Waterloo and London-St. Thomas managed to buck the trend by recording modest monthly price gains.
Given these localized headwinds, experts emphasize the importance of setting clear expectations from the outset. Establishing a predetermined price-review date before a property goes live on the Multiple Listing Service ensures that both the agent and the seller have a roadmap. If initial showings and formal offers fail to materialize within a reasonable timeframe, the seller should already understand the necessary next steps, avoiding the heavy financial cost of letting a listing go stale on the market.
The forecast keeps losing sales
The frequency and scale of CREA’s forecast adjustments highlight the unpredictable nature of the current economic cycle. As recently as July, the association’s outlook projected 463,336 residential sales for 2026 and 480,567 transactions for 2027. The October update slashed those expectations significantly, bringing the projected totals down to 444,530 for 2026 and 464,235 for 2027, alongside downward revisions to the 2025 comparison baseline.
In contrast, the national price outlook has experienced far more modest revisions. CREA anticipates that the national annual average price will edge up by 0.2 per cent to reach $681,681 in 2026, followed by a further 1.2 per cent increase to $689,909 in 2027. At the provincial level, Ontario is projected to log a 3 per cent decline in average prices over the course of the year, followed by a slight 0.7 per cent recovery next year.
Analysts note that annual transaction averages can remain relatively stable even while monthly benchmark prices trend downward. These broad averages are heavily influenced by shifts in the composition and mix of homes changing hands. Consequently, individual property owners cannot simply apply a national forecast figure—such as a projected 0.2 per cent price increase—directly to their own home’s valuation.
Pent-up demand is still waiting
The narrative surrounding pent-up demand has noticeably cooled across the industry. While CREA’s long-term projections continue to reference sidelined buyers waiting for better conditions, September’s subdued market activity and consecutive forecast downgrades suggest that psychological readiness is not enough. Households hoping to enter or re-enter the housing market must still satisfy strict qualification criteria, relying on personal income and mortgage approvals that align with today’s lending environment.
The anticipated market rebound heading into 2027 relies heavily on several macroeconomic assumptions, including a period of slow economic growth, renewed population expansion, and greater certainty regarding future interest rate trajectories. CREA’s models assume limited monetary policy tightening by the Bank of Canada over the coming year, even though broader financial markets had previously priced in approximately 100 basis points of rate increases around the time the forecast was finalized. Any additional tightening by the central bank would present significant hurdles to an already fragile recovery.
Even if CREA’s projected 4.4 per cent sales rebound materializes in 2027, total transaction volumes would still remain roughly 0.9 per cent below the levels achieved in 2025. While established brokerages are generally positioned to weather this prolonged period of soft activity, individual sellers face a more immediate imperative: pricing strategies must align with the financial realities of buyers who are qualified to close transactions in the present market, as waiting for external forecasts to improve carries mounting financial costs.