Canadian Home Sales Fell 6.9% in August While Prices Barely Moved

Canadian home sales were 6.9% lower than a year earlier in August and the national price index was flat on the month, with inventory at 4.8 months.

The Canadian Real Estate Association released its August figures on 15 September 2026 at 05:00 Eastern time. Sales across Canadian MLS Systems slipped 0.7% from July and were 6.9% lower than August 2025. The national MLS Home Price Index composite was unchanged on the month and down 3% year on year, while the non-seasonally adjusted national average price came in at 668,219 Canadian dollars, up 0.6% from a year earlier.

A fourth month of almost nothing

The association's senior economist Shaun Cathcart summed the release up in one line: "Sales activity and price trends were largely unchanged for a fourth consecutive month in August."

The inventory figure backs him up. Months of inventory stood at 4.8, unchanged for the fourth consecutive month. That is the measure of how long the current listing stock would take to clear at the current pace of sales, and a reading that sits still for four months describes a market in which neither side is forcing the other's hand.

The two price numbers point in opposite directions

A reader could take away either that Canadian prices rose 0.6% over the year or that they fell 3%. Both figures are in the same release, and only one of them is a price measure.

The average price is the arithmetic mean of what actually changed hands. It moves when the mix of what sells moves, so a month with proportionally more transactions at the expensive end lifts the average without any individual home becoming more expensive. The Home Price Index is built to strip that out by holding the characteristics of the property constant. When the two diverge, as they have here by 3.6 percentage points, the gap is telling you about composition, not about value.

For anyone underwriting a Canadian purchase, the index is the number to use. The average is the number that makes headlines.

Supply is the side that moved

New listings rose 3.3% on the month, and the ratio of sales to new listings fell to 49.1% from 51.1% in July. That ratio is the cleanest single gauge of the balance between the two sides of the market, and a fall of two points with volumes broadly flat means the additional supply is not being absorbed.

That is the mechanism behind a flat price index. Sellers are coming to market faster than buyers are clearing them, but not so much faster that prices are being forced down; the pressure is showing up in time on market and inventory rather than in the asking price.

What a non-resident buyer is looking at

From our 7 September snapshot, the Canadian national price level is 4,320 US dollars per square metre, carrying Medium confidence, with a gross rental yield of 5.72% and a net yield of 4.53% after the 20.72% effective rental tax we model for a standardised non-resident case. Transaction costs run to 10.6%. Our own year-on-year figure is minus 3.3% in Canadian dollars and minus 3.2% in US dollars, which sits close to today's index reading of minus 3%.

The longer view is the more interesting one. Over five years our Canadian price series is down 6.1% in local currency and 14.9% in US dollars, the correction that has run since the 2022 peak. Our bubble risk score is 45, in the moderate band and one of the lower readings across our developed-market coverage, with a price-to-income ratio of 7.5.

One caveat sits above all of this. Our ownership field records a prohibition on purchases of residential property by foreign buyers running to 2027. The legislation carries exemptions that our standardised model does not attempt to capture, so anyone affected should check the rule as it stands rather than rely on a summary. For most non-resident buyers, Canada in September 2026 is a market to watch rather than one to enter.

Sources: CREA https://www.globenewswire.com/news-release/2026/09/15/3361777/0/en/canadian-home-sales-slide-down-slightly-in-august.html

Market data: Canada