Autumn Housing Market Fails to Respond to Rate Relief
Canada's resale real estate market experienced an unexpected downturn this autumn despite improving consumer confidence and two consecutive interest rate reductions. According to a recent RBC Economics report, the typically busy fall season failed to deliver the anticipated rebound in housing activity across most major Canadian markets.
The October data revealed year-over-year sales declines in nearly all major markets, with Edmonton leading the downturn at a substantial 17 percent decrease. Other western markets followed closely behind, with Vancouver recording a 14 percent drop, the Fraser Valley region down 15 percent, and Calgary experiencing a 13 percent decline.
Regional Variations Paint Complex Picture
While most markets struggled, two eastern cities bucked the national trend. Montreal emerged as the standout performer with resale activity growing nearly five percent year-over-year, making it the busiest resale market among Canada's major urban centers. Ottawa saw more modest growth at approximately two percent.
The supply situation varied significantly across markets. Ottawa led the nation in new listing growth with a substantial 24 percent increase year-over-year, while Edmonton saw the second-largest jump at nearly 15 percent. This increased inventory in several markets is beginning to shift dynamics in favor of buyers.
Market-Specific Challenges and Opportunities
Toronto, Canada's largest housing market, continues to face headwinds with resales down more than nine percent year-over-year. The RBC report expressed skepticism that recent interest rate cuts would overcome challenges including low job growth and tariff-driven uncertainty in the Toronto area. The city's MLS Home Price Index remains five percent below last year's levels and activity continues to lag pre-pandemic benchmarks.
Montreal's market strength appears driven by persistent low supply, with MLS prices growing five percent year-over-year. RBC predicts the Quebec market should maintain strong conditions as lower interest rates take effect.
Vancouver's outlook remains clouded by ongoing affordability issues, though higher inventory is providing buyers with increased negotiating power. Meanwhile, in Alberta, both Calgary and Edmonton - among Canada's least expensive major markets - are seeing demand pullbacks alongside rising supply, creating additional opportunities for buyer negotiation.
The report highlights that despite two 25-basis-point cuts to the Bank of Canada's overnight rate, the housing market continues to face significant challenges. The increased supply in several regions suggests buyers may have more options and bargaining power heading into the winter months, potentially setting the stage for interesting market dynamics in early 2026.
