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Housing Market Shift: What Buyers Need to Know in Sept 2025
Navigate September's Canadian real estate turning point: Bank of Canada rate cuts, surging listings, and expert insights for strategic moves in housing markets through year-end 2025.
Dear Valued Subscriber
We have fresh turns in the Canadian real estate story. From rate cuts to rising listings and new federal action on affordable housing, the pieces are shifting. This week, RealEdge digs into the latest—and what it really means for your housing decisions from here through year-end. |  Good Morning |
📌 Here’s what’s coming in today’s issue:
BoC’s rate cut & what’s changing now
Listings, prices & market heatmaps: August in review
Build Canada Homes: federal agency stepping up supply
What to expect heading into Fall & Q4 2025
RealEdge action plan for buyers, sellers & investors
1. BoC’s latest move & what shifts now
On September 17, the Bank of Canada cut its overnight policy rate by 25 basis points to 2.50%, its lowest in three years. Key drivers: a weakening job market (unemployment rising), slowing inflation pressures, and ongoing trade/tariff friction. Reuters+2Bank of Canada+2
Prime rates and variable-rate mortgages are expected to adjust downwards—variable borrowers will see relief faster; fixed rates will likely drift down more slowly as bond yields settle. True North Mortgage+1
Significance: this cut isn’t just about lower payments—it’s about aligning demand, affordability, and supply in a market under pressure. It gives relief, but the room to move is smaller than in past easing cycles.
2. Listings & prices: August 2025 under the microscope
📉 Home Prices: Canada’s national average sale price fell to ≈ $664,078 in August, down ~1.3% from July but still ~1.8% higher year-over-year. The benchmark HPI dropped ~0.9% month-to-month and sits ~3.4% below its August 2024 level. WOWA
📊 Sales & listings: Transactions rose modestly (~1.1% MoM), making August the best August for Canadian MLS® sales since 2021. New listings increased ~2.6% month-over-month; active listings are ~8.8% higher than a year ago. WOWA
📉 Toronto area trend: After several months of gains, GTA resales dipped ~1.8% in August (seasonally adjusted), largely due to weakness in condominium sales. However, year-over-year, resales are still up ~2.3%. Price growth remains muted. RBC
3. Build Canada Homes & federal supply push
September 14 saw the launch of Build Canada Homes, a new federal agency with an initial investment of C$13 billion, tasked with accelerating affordable housing supply. It aims to work with private builders, use public lands, and help lower costs for homebuilders. Canada PM+2Reuters+2
The agency is designed to be a long-term instrument, with (among other mandates) increasing affordable housing units, leveraging CMHC’s programs (loans, insurance), and catalyzing private capital. Canada.ca
Why this matters: Rate cuts help demand. But without supply, prices remain high. Build Canada Homes is a strong signal that government recognizes supply as the bottleneck. For markets with backlog and land availability, this could moderate price pressures over time.
4. What to expect: Fall & Q4 2025 projections
Metric | Expectation |
|---|---|
Mortgage rates | Variable rates drop first; fixed-rate decline will lag but modest gains (0.2-0.5%) possible as bond yields adjust. |
Price movement | Flat to slightly negative in overheated areas (Toronto, Vancouver condos). Modest gains (1–2%) in balanced and supply-constrained regions (Prairies, Atlantic Canada, parts of Québec). |
Sales activity | Bump heading into Thanksgiving & early fall; perhaps the strongest Q4 since 2021 for many markets due to pent-up demand + affordability improvements vs. high interest period. |
Inventory pressure | Listings expected to remain elevated; however, where listings decline (or supply is constrained), prices may stabilize or modestly improve. |
Rent market | Tightness likely to persist in purpose-built rentals and family-sized units; affordability pressures push more buyers toward renting. |
5. RealEdge Action Plan
Here’s what to do now—depending on your role:
Buyers: Get mortgage pre approvals now; lock in variable or short fixed rates. Watch for seller concessions in condo or over-stocked listing types. Look outside core to get more bang per dollar.
Sellers: Quality matters more than ever. Improve presentation, focus on upkeep. Energy efficiency, low maintenance, desirable amenities (transit, schools) can earn you premium offers.
Investors: Lean into supply-constrained secondary markets. Focus on family-sized rentals & areas with transit or infrastructure improvements. Stress test deals for rent downside & vacancy risk.
Builders/Developers: Keep an eye on the Build Canada Homes agency. Public land deals + incentives could shift project economics. Also monitor regulatory changes (like BC’s mortgage services and other local zoning/red tape reforms).
Bottom Line
Today’s rate cut is a ripple with reach. It doesn’t reverse the strain many are feeling, but it helps. Combined with rising listings, muted price growth, and new affordable housing policy tools, it sets the stage for a more balanced market as we head into fall.
Stay tuned—next week we’ll dissect mortgage payment renewal risks, especially for fixed-rate holders, and what that means for Toronto vs. smaller markets.
The RealEdge Team
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