September's Weaker-Than-Expected Canada House Sales Raise Risk Q4 Sales Activity Could Be Softer Than TD's Estimates

11:06 AM EDT, 10/16/2025 (MT Newswires) -- Canadian existing home sales declined 1.7% month-on-month in September, ending a series of gains that began in Apri, said TD after Thursday's Canadian Real Estate Association (CREA) data.

The pullback in sales was broad-based, with large drops in British Columbia (-3.0% month over month) and Alberta (-5.4%), and smaller declines in Ontario (-0.7% month over month), and Quebec (-0.8%). In contrast, gains were observed in Saskatchewan (+1.7% month over month), and Manitoba (5.6%).

New listings dipped 0.8% m/onth over month in September. With sales falling faster than new listings, the sales-to-new listings ratio loosened 0.5 percentage point to 50.7%. The ratio remains below its long-term average, suggesting the national market is a touch looser than normal.

Average home prices edged higher by 0.2% month over month in September. B.C. did the heavy lifting, with prices up 1.0% month over month, although they also increased solidly in Newfoundland and Labrador (+2.8%).

In contrast, prices fell modestly in Alberta (-0.6% month over month) and Quebec (-0.8%) and were flat in Ontario. They were down 1.0%, on average, in Saskatchewan and Manitoba, and were slightly lower on average across the rest of the Atlantic region.

The MLS home price index, a more "like for like" measure, dipped 0.1% month over month, and was down 3.4% on a year-on-year basis. Prices for detached units were down 0.2% month over month, while condo prices fell 0.3% month over month. In contrast, prices for towns/rows were up 0.3% month over month.

After bouncing off their early-year lows from April - August, growth in Canadian home sales appeared to take a breather in September. However, for Q3, sales were up 7%, which will support overall economic growth via a boost to residential investment, stated TD.

On the price front, Canadian benchmark price growth remains soft, consistent with loose supply/demand balances in B.C. and Ontario, offsetting tighter conditions everywhere else in the country.

Notably, Canadian average home price growth continued to outperform its benchmark counterpart last month -- although modestly -- lifted by compositional forces, in other words, more expensive housing selling relatively well, lifting average prices.

September's weaker-than-expected sales performance raises the risk that Q4 sales activity could be softer than projected in TD's latest forecast. The bank's current view sees a modest, gradual rise in housing activity through next year, supported by pent-up demand and ample available supply in the near-term, and an improving job market in 2026.

However, Canadian average home price growth will likely lag Canadian sales gains, weighed down by B.C. and Ontario, according to the bank.

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