Canadian Home Sales Rebound in October 2025 Amid Lower Rates and Tighter Supply

Canadian Home Sales Achieve Modest Growth in October 2025

In a notable development for the Canadian real estate sector, home sales increased by 0.9% month-over-month in October 2025, marking a consistent upward trend observed in six out of the past seven months. This growth reflects a resilient market adapting to favorable economic conditions, such as lower borrowing costs and a steady labor market. The sales-to-new-listings ratio rose to 52.2%, emphasizing balanced market conditions. Inventory levels dropped to 4.4 months, showcasing the lowest since January 2025, as reported by WOWA.ca. The rise in sales and decrease in inventory suggest a tightening supply, which could support price stabilization or even increases in the coming months.

National Sales and Price Trends Highlight Market Shifts

According to CREA, the national average home price reached $690,195 in October 2025, a 2.1% increase from the previous month, but still 0.9% lower than October 2024. The MLS® Home Price Index (HPI) edged up 0.2% month-over-month, yet it remained 3% below the same period last year. Despite these annual declines, the recent monthly growth indicates an emerging recovery trend, driven largely by improved market sentiment and economic stability. The actual sales activity was 4.3% below October 2024, reflecting the ongoing adjustment phase post-pandemic effects.

Regional Dynamics: Ontario and British Columbia in Focus

In regions like Ontario and British Columbia, the market dynamics are particularly noteworthy. RENX highlights that these provinces are experiencing a shift in supply-demand conditions favoring buyers due to high inventory and competitive pricing. Despite this, the easing of economic fears and reduced interest rates have bolstered buyer confidence. RBC Economics forecasts a modest 0.7% rise in the national composite RPS Home Price Index in 2025, followed by a slight decline in 2026, particularly impacting these provinces.

Impact of Lower Borrowing Costs on Buyer Confidence

The reduction in borrowing costs has significantly bolstered buyer confidence across Canada. With the Bank of Canada's policy rate expected to hold at 2.75% through 2026, homebuyers are finding more favorable conditions for financing. This situation has led to an increase in activity, particularly in the middle-market segment, where affordability remains a key concern. According to RBC Economics, these conditions are likely to persist, supporting a gradual market recovery.

The reduction in borrowing costs has significantly bolstered buyer confidence across Canada.

Real Estate Investor Sentiment and Strategic Opportunities

For real estate investors, the current Canadian market presents both challenges and opportunities. As highlighted by RENX, developers are increasingly pivoting from condo projects to rental apartments, driven by municipal incentives and CMHC programs. This shift is seen as a strategic response to the long-term affordability crisis, with rental properties offering a more stable income stream amidst market fluctuations. The market's transition phase also presents an ideal time for investors to reassess portfolios and explore emerging sectors such as student and senior housing.

Future Implications for the Canadian Housing Market

Looking forward, the Canadian housing market's trajectory will likely be influenced by ongoing supply constraints and economic conditions. The anticipated balance between sales and new listings suggests stability in the near term, but potential interest rate adjustments could pose risks. RealEstateAbroad.com analysis anticipates that strategic investment in key sectors and regions will be crucial for capitalizing on growth opportunities. Continued monitoring of policy changes and economic indicators will be essential for investors aiming to navigate this complex market landscape effectively.