OTTAWA — The Canadian Real Estate Association has upgraded its forecast for home sales in 2025, saying it now expects a softer decline this year as activity continues to rebound. It comes as September home sales rose 5.2 per cent from a year ago, marking the most activity for the month since 2021. There were 39,700 home sales across the country last month, up from 37,721 in September 2024. The uptick is unsurprising, said Brendon Cowans, a sales representative for Toronto-based brokerage Property.ca, who said September’s interest rate cut has led to improved sentiment. “I’m seeing slightly more activity, bidding wars are coming back in certain segments,” Cowans said. “It’s kind of turning that curve where I’m hearing people saying, ‘Hey, there may be some opportunity to be had here, the rates are where they are now, the prices are lower than I’ve seen in many years -- maybe now’s a good time to get into the market.”’ In its outlook released Thursday, CREA said it now expects a total of 473,093 residential properties to be sold in 2025 -- a 1.1 per cent decline from 2024, after projecting a three per cent drop in its July forecast. It said it still expects decreases in activity in B.C., Alberta and Ontario, offsetting gains throughout the rest of the country. The improved forecast comes after repeated downgrades earlier this year. In January, the association predicted an 8.6 per cent year-over-year increase in sales for 2025, before U.S. President Donald Trump’s tariffs began to cast a dark cloud over the economy. Three months later, CREA cut its forecast and said it expected home sales to remain essentially unchanged from 2024. On Thursday, it also said that the national average home price is expected to fall 1.4 per cent on an annual basis to $676,705 in 2025. Its forecast said only B.C. and Ontario would see declines in average home prices, which would be enough to offset price gains in the range of four to eight per cent in most other provinces. “With three years of pent-up demand still out there and more normal interest rates finally here, the forecast continues to be for further upward momentum in home sales over the final quarter of the year and into 2026,” said CREA senior economist Shaun Cathcart in a press release. CREA said it now forecasts national home sales in 2026 to rebound by 7.7 per cent to 509,479, up from a 6.3 per cent gain predicted last quarter. The national average home price is expected to increase 3.2 per cent from 2025 to $698,622 next year. Meanwhile, the national average sale price rose 0.7 per cent in September compared with a year earlier to $676,154. CREA’s own home price index, which aims to represent the sale of typical homes, ticked 0.1 per cent lower between August and September 2025. While home sales improved on an annual basis last month, they decreased 1.7 per cent from August, ending a streak of five straight monthly increases. “At the national level, sales are back in-line with pre-COVID norms,” said BMO senior economist Robert Kavcic in a note. However, he said affordability “is still challenged, leaving potential homebuyers needing either further price declines, or lower mortgage rates to get the market clearing better.” “We suspect that if we start to see low-three-per-cent mortgage rates, it might provide a spark, but we’re not there yet.” Cowans said there’s still some hesitation apparent in the market. In the Greater Toronto Area, he said affordability is at a similar level to what many people have grown used to over recent years, but buyers haven’t rushed back to the market in droves. He said concerns over the trade situation continue to linger, with U.S. tariffs on Canadian goods still in place. “People are just unsure,” Cowans said. “I think one of the things people are unsure about is really what’s come from our neighbours in the States ... and how it would affect Canada. People are still cognizant of that fact and there are some people who are still afraid.” New listings dipped 0.8 per cent in September from August. There were 199,772 properties listed for sale across Canada at the end of the month, up 7.5 per cent from a year earlier. This report by The Canadian Press was first published Oct. 16, 2025.
