The Bank of Canada's message that it doesn't want to cut rates further could lead buyers waiting for the best deal to make a home purchase, says CREA senior economist Shaun Cathcart.JONATHAN HAYWARD/The Canadian Press
Canadian home sales have now increased for six of the past seven months, as declining interest rates and cheaper mortgage rates prompt more buyers off the sidelines.
There were 40,423 homes sold nationally in October, a 0.9-per-cent increase from September, but still 4.3 per cent below October, 2024, according to data from the Canadian Real Estate Association. The report found that new listings decreased by 1.4 per cent to 77,479 units from September to October.
CREA senior economist Shaun Cathcart said the Bank of Canada’s interest-rate cut in September was a major driver for last month’s growth in sales activity. The BoC also delivered a rate cut at the end of October, leading him to expect further growth in the coming months.
“The October drop wouldn’t have impacted this month’s numbers, so it further bolsters the idea that this is going to continue,” Mr. Cathcart said.
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The Bank of Canada has signalled that it doesn’t expect to cut rates below its current level of 2.25 per cent, and Mr. Cathcart said that messaging could also lead buyers that have been waiting for the best possible rate to make a purchase.
“I think a lot of people have been waiting for rates to stop falling before locking in, and I think if that messaging gets through – that you’re not going to get better rates than this – that could really draw buyers off the sidelines,” he said.
CREA’s national Home Price Index, which attempts to offer a clearer picture of valuation changes than average sales prices, ticked up by 0.2 per cent to $688,800 from September to October.
Quebec City has emerged as one of Canada’s hottest markets over the previous year, with October sales activity increasing by 15.7 per cent compared with the previous year and by 8.7 per cent compared with September.
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In other regions, the Metro Vancouver area posted a 4.2-per-cent month-over-month increase, and the Greater Toronto Area, meanwhile, posted a 2.3-per-cent month-over-month decline.
Mr. Cathcart said he expects that the true impact of the Bank of Canada’s interest-rate cuts won’t be felt until the spring, which is traditionally the beginning of the real estate market’s busy period.
If interest rates remain low in 2026, Mr. Cathcart said the new major driver of sales trend will be any news related to trade with the U.S.
