Canadian Real Estate Sales To Remain Weak and Industry Dealt a Blow

The Canadian real estate market is under pressure and many experts say sales will stay weak for some time. Rising interest rates have pushed monthly mortgage costs higher, putting more strain on buyers. Because of that, fewer people can afford homes at the previous price levels. The gap between what people earn and what homes cost has grown too wide.

A major move shook the industry this week. RE/MAX Ontario Atlantic Canada agreed to a class action settlement that challenges long held rules in Canada’s organized real estate system. The firm decided to drop mandatory real estate board membership for its agents and brokers. This shift threatens the traditional model where agents were required to belong to boards and pay fixed commission structures.

Economists at BMO warn that sales will remain weak until prices come down. They argue that reduced mortgage rates alone cannot stimulate enough demand under current inflation pressures. In their view, home prices must fall to restore balance between what people can afford and what sellers expect.

Homes are already slipping in value in many parts of Canada. In July, the price of a typical house dropped by 0.7 percent, about $4,700, marking one of the largest monthly declines since late 2024. At the same time, more homes are being listed for sale, which gives buyers more choices and forces some sellers to lower prices to attract offers.

Another challenge is shifting immigration patterns. While immigration used to help boost housing demand, now it is adding stress to affordability in certain regions. Banks such as RBC believe this trend, combined with weak affordability, may cause home prices to fall back to levels seen in 2024 over the course of the coming year.

Overall, the Canadian real estate industry is facing serious headwinds. Sales are expected to remain weak until prices correct more deeply. The recent legal settlement by RE/MAX OAC may be a turning point in how real estate operates in Canada, but it also adds uncertainty to a market already strained by high costs, tight credit, and shifting demand.