Canadian Home Sales Edge Upward in August

Carola Singer • October 3, 2018

The Canadian housing market showed continued signs of stabilizing last month with sales edging upward and prices easing a bit. National home sales increased 0.9% in August, the fourth consecutive monthly gain. Sales in Toronto advanced 2.2% while they rose 2.9% in Vancouver. Nevertheless, the pace of sales activity remains below levels in most other months going back to 2014 (see chart below). As well, recent monthly sales increases are diminishing, which could mean that the recent rebound, particularly in Ontario, could be running out of runway.

The housing market has been recovering from steep sales declines early this year after federal regulators imposed stricter mortgage lending rules and the central bank raised borrowing costs. Home sellers also seem to be lowering prices for homes, fueling demand.

Roughly half of all local markets posted an increase in sales from July to August, led again by the Greater Toronto Area (GTA), along with gains in Montreal and Edmonton. Sales in the major urban areas of BC declined by 3.8% year-over-year (y/y) in August. The housing market in BC has slowed considerably since the February provincial budget hiked the foreign purchase tax and suggested a speculation tax could be introduced in the fall.

New Listings

The number of newly listed homes was unchanged between July and August, as new supply gains in the Greater Vancouver Area (GVA) and Montreal offset declines in the GTA and Winnipeg.

With sales up slightly and new listings unchanged, the national sales-to-new listings ratio edged up to 56.6% in August compared to 56.2% in July. The long-term average for this measure of market balance is 53.4%.

Based on a comparison of the sales-to-new listings ratio with the long-term average, about two-thirds of all local markets were in balanced market territory in August 2018.

There were 5.2 months of inventory on a national basis at the end of August 2018, right in line with the long-term average for the measure.

Home Prices

The Aggregate Composite MLS® Home Price Index (MLS® HPI) was up 2.5% y/y in August 2018, well below the booming pace in 2016 and early 2017. Benchmark home prices fell by 0.6% from July to August, the biggest decline since August of last year. The price decline was driven by Vancouver, where prices dropped 1.4%, the most significant monthly drop in a decade. Toronto home prices fell 0.3% in August.

Condo apartment units posted the most substantial y/y price gains in August (+9.5%), followed by townhouse/row units (+4.3%). Meanwhile, one-storey and two-storey single-family home prices were little changed on a y/y basis in August (+0.4% and -0.4% respectively).

Trends continue to vary widely among the 17 housing markets tracked by the MLS® HPI. Home price gains are diminishing on a y/y basis in the Lower Mainland of British Columbia (GVA: +4.1%; Fraser Valley: +10.7%). Prices in Victoria were up 8.5% y/y in August. Elsewhere on Vancouver Island, prices climbed 13.6%.

Among the Greater Golden Horseshoe (GGH) housing markets tracked by the index, home prices were up from year-ago levels in Hamilton-Burlington (+7.2%), the Niagara Region (+6.6%), Guelph (+5.5%), the GTA (+1.4%) and Oakville-Milton (+1.2%). By contrast, home prices remained down on a y/y basis in Barrie (-2.7%).

In the Prairies, benchmark home prices remained down on a y/y basis in Calgary (-2.2%), Edmonton (-2.1%), Regina (-4.8%) and Saskatoon (-2.3%).

Meanwhile, home prices rose by 7.1% y/y in Ottawa (led by an 8.2% increase in two-storey single-family home prices), by 5.9% in Greater Montreal (driven by a 6.3% increase in two-storey single-family home prices) and by 4.8% in Greater Moncton (led by a 7.5% increase in two-storey single-family home prices). (see Table below)

Bottom Line

Housing markets continue to adjust to regulatory and government tightening as well as to higher mortgage rates. The speculative frenzy has cooled, and multiple bidding situations are no longer commonplace in Toronto and surrounding areas. The housing markets in the GGH appear to have bottomed, and supply constraints may well stem the decline in home prices in coming months. The slowdown in housing markets in the Lower Mainland of BC accelerated last month as the sector continues to reverberate from provincial actions to dampen activity, as well as the broader regulatory changes and higher interest rates.

Since the implementation of new mortgage standards, nonprice lending conditions for mortgages and home equity lines of credit have also tightened. Additional rate hikes by the Bank of Canada are coming this fall, likely in late-October if the NAFTA negotiations appear to be progressing. The economy is running at full capacity, unemployment is low, and incomes are rising. Inflation is expected to return to the Bank of Canada’s 2% target, and uncertainty regarding trade with the US remains, but the central bank will continue to cautiously raise its trend-setting interest rate through the end of next year.

This article was written by Dr. Sherry Cooper DLC’s Chief Economist.

RECENT POSTS 

How Property Type and Condition Influence Mortgage Financing

By Carola Singer • September 16, 2026
Why the Property Matters When You’re Qualifying for a Mortgage When qualifying for a mortgage, lenders typically look at four core areas: Income Credit Down payment or equity The property itself Most buyers focus heavily on income, credit, and savings—and for good reason. But even if those boxes are checked, the property can still determine whether a mortgage is approved. Why Lenders Care About the Property From a lender’s perspective, the property is the collateral for the mortgage. In the unlikely event of default, they need to know the home can be sold quickly and at fair market value to recover their funds. Because of this, lenders are careful about the condition, value, and marketability of any property they finance. Homes that are in poor repair, unconventional, or overpriced can raise red flags—even when the borrower is well qualified. Appraisals Are Always Part of the Process Every mortgage requires an appraisal to confirm value. Insured mortgages (through CMHC, Sagen, or Canada Guaranty) often use an automated valuation model completed online. Conventional mortgages typically require a full, on-site appraisal by a certified appraiser. This appraisal is not optional and happens after an offer is accepted—not at the pre-approval stage. Why Pre-Approvals Aren’t a Guarantee A pre-approval is a great first step, but it only assesses you, not the property. Once you’ve made an offer, the lender must approve the specific home you’re buying. Understanding this upfront helps avoid surprises and confusion later in the process. The Risk of Buying Without a Financing Condition In competitive markets, buyers sometimes remove financing conditions to strengthen their offer. However, this comes with risk. If the appraisal comes back low—or the lender is concerned about the property’s condition—you could be denied financing after the offer is firm. In that scenario, your deposit may be at risk. Buying a Home That Needs Work If you’re considering a property that isn’t in perfect condition, there are solutions. A purchase plus improvements program allows you to buy a home and include renovation costs in your mortgage. The process is structured and requires planning, but it can be an excellent way to turn a fixer-upper into a great long-term investment. Final Thoughts Mortgage approval isn’t based solely on your finances—the property matters just as much. Knowing this ahead of time helps you make smarter offers, reduce risk, and plan more effectively. If you’re buying a property that needs work or want clarity on how a lender may view a specific home, feel free to reach out. I’d be happy to walk you through your options and help you plan with confidence.

What You Need to Know About Mortgages and Parental Leave

By Carola Singer • September 9, 2026
If the title of this article caught your attention, chances are your family is growing. Congratulations. If you’re thinking now is the right time to move into a home that better fits your growing family—but you’re unsure how parental leave affects your ability to qualify for a mortgage—you’re in the right place. Here’s the good news. Qualifying for a mortgage while on parental leave is possible when it’s done correctly. When you work with an independent mortgage professional, lenders can often qualify you based on your return-to-work income , as long as you can provide documentation confirming you have guaranteed employment waiting for you. A word of caution If you walk into a bank branch and disclose that you’re currently on parental leave, there’s a chance the bank will only allow you to qualify using your parental leave income. That can significantly reduce your borrowing power. Parental leave income is typically limited to 55% of your previous earnings, up to a weekly maximum. Qualifying on that amount alone can restrict your options and impact the type of home you can purchase. Why lender choice matters One of the biggest advantages of working with an independent mortgage professional is choice . You’re not limited to one lender’s rules or products. Some lenders will allow you to qualify using 100% of your confirmed return-to-work income , which can make a meaningful difference in your approval amount and overall options. What you’ll need to qualify Most lenders will require an employment letter that includes: Employer name (preferably on company letterhead) Your job title Original start date (to confirm probation has been completed) Confirmed return-to-work date Guaranteed salary upon return Lenders want reassurance that your income will resume once parental leave ends. You may also be asked to provide income history from the past couple of years, which is standard for most mortgage applications. One important note Whether or not you actually return to work after parental leave is entirely your decision. From a mortgage perspective, qualification is based on having a confirmed position available to you at the time of approval. If you have questions about qualifying for a mortgage while on parental leave—or anything mortgage-related—please connect anytime. I’d be happy to walk you through your options and help you plan with confidence.