At a Glance

• Buyer showings fell to 16,869 in September, down 20.0 percent from August and 16.1 percent from a year ago. It is the first year-over-year decline since February 2025 [1]
• 2026 is still a busy year overall: 185,032 showings through September, 25.4 percent ahead of the same stretch of 2025 [1]
• The latest board data showed sales down 10.9 percent year over year, new listings down 14.8 percent, and supply at 3.5 months [2]
• Benchmark prices sit at $628,300 in Kitchener-Waterloo (down 6.0 percent year over year) and $666,400 in Cambridge (down 4.2 percent) [2]
• The Bank of Canada held its policy rate at 2.25 percent on September 2, its seventh straight hold. The next decision is October 28 [3][5]
• The 5-year Government of Canada bond yield closed at 3.69 percent on September 29, roughly half a point above early August. That is pushing fixed mortgage rates up even with the Bank on hold [4]
• Canada-US trade talks broke down in late August. A 50 percent US tariff now applies to $27.6 billion of Canadian goods, and Canada has matched it dollar for dollar [9]
• Kitchener-Cambridge-Waterloo unemployment was 8.2 percent in August, against 6.4 percent nationally [7][8]
• Inflation held at 3.0 percent in August, or 2.4 percent excluding gasoline [6]

NOTE:  For this month's blog I'm citing sources which you can find at the bottom of this post with associated hyperlinks should you want to investigate something further.  Also remember that most of the charts are interactive and you can toggle between various sets of related numbers, charts and graphs.

Showings

I'm beginning with showings this time as this was perhaps the most surprising set of numbers coming out of September for me.  Buyer showings fell to 16,869 in September, down 20.0 percent from August's 21,091 and 16.1 percent below September 2025 [1]. That is the first year-over-year decline since February 2025, ending an 18-month run of gains.

Some cooling is normal once school is back. Over the previous four years, showings slipped an average of 6 percent from August to September. This year's drop was more than three times that, and it is the steepest August-to-September decline in the five-year record we are considering in this post.

For those of you who read these regularly you will know that the YTD is still well above the past 2 years, but for those of you who are less familiar, let's put this into some context for you.  Even after the pullback, 2026 has logged 185,032 showings through nine months. That is 25.4 percent ahead of the same stretch of 2025 and already close to last year's full-year total of 194,302. The spring was exceptional, peaking at 24,407 in May. September sits 31 percent below that peak.

I think the up and down is what is most noteworthy.   Year-over-year growth ran above 40 percent from January through April and held between 24 and 33 percent through July. It flattened to 0.7 percent in August, then turned negative in September. Buyers did not disappear overnight. Momentum had been fading since midsummer, and the collapse of Canada-US trade talks on August 21 landed right as the fall market was supposed to begin.  Now to be clear I am not saying one caused the other, I am simply pointing out what happened when.   

If you're in a good mood and want to snap out of it, here's a post I wrote on the possible relationship. CUSMA for investors found at:  https://terryriddoch.ca/trade-wars-cusma-and-your-apartment/ .

Not to get too far in the weeds but I have been asked about this.  Showing counts depend partly on how many listings are booked through the same system, so the long-run climb overstates true demand growth. Same-month comparisons over the past year are what to look at.  Think of this like a health app on your phone; the exact number of something does not matter, it's the trend.

Sales, Listings and Prices

Showings are the earliest read on the market. Closed sales follow a few weeks behind, and the board's September figures arrive in the first week of October. The most recent board data covers August, and it already pointed to a cautious market.

Waterloo Region sales fell 18.9 percent from July and 10.9 percent from August 2025 [2]. Sellers pulled back even harder. New listings dropped 24.5 percent month over month and 14.8 percent year over year [2].

Prices are softer than a year ago but not falling quickly. The median sale price was $673,000, down 0.8 percent from August's $678,500 and 3.9 percent from $700,000 last September [2].

The split by property type is wide and after showings data is the most interesting for me. Single-family homes held up best at a $750,000 median, down 2.3 percent year over year, with semi-detached homes at $600,000, down 3.2 percent. Townhouses fell 11.3 percent to $545,450 and condos fell 13.2 percent to $349,000 [2]. With only 42 condo sales in the month, that reading can swing.

The homes that did sell went for close to asking. The average sale closed at 100.3 percent of list price, up from 99.8 percent in August and just under the 100.6 percent of a year ago. Townhouses led at 101.9 percent, semi-detached homes at 101.1 percent and single-family homes at 100.6 percent. Condos remained the soft spot at 96.4 percent [2]. Fewer buyers are out, but well-priced freehold homes are still finding them.

Nationally the picture is similar. CREA reported 37,504 sales in August, down 6.9 percent from a year earlier, with the national average price at $668,219, up 0.6 percent. CREA's senior economist noted that fixed mortgage rates have already risen on higher bond yields [10].

As a quick aside, bonds are mostly ignored by real estate press as well as buyers and sellers.  If you are in the market, don't make that mistake.   Quick look at how bonds work, how they affect mortgages and what is going on with them nowish (this is about a month old but still holds) you should read this:   https://terryriddoch.ca/when-war-in-the-middle-east-lands-on-your-doorstep/ .  We will also take a better look below.

Supply and the Showings-to-Sales Gap

Inventory rose in September but remains well below last year. There were 1,840 homes for sale at month end, up 6.9 percent from August and down 12.8 percent from September 2025. Months of supply moved up to 3.8 from 3.5, against 4.0 a year ago [2].

Conditions still vary sharply by property type. Semi-detached homes are the tightest at 2.3 months, followed by single-family homes at 3.2 and townhouses at 4.4. Condos sit at 6.9 months, down from 7.3 in August, and continue to offer buyers the most choice [2].

That matters for how to read September. Falling sales with a pile of unsold listings would point toward price cuts. Here, sales are down 20.7 percent from last year and inventory is down 12.8 percent. Both sides have stepped back, which tends to produce lower volume rather than sharply lower prices.  So read that again..  lower inventory should mean higher prices, but not if the demand side is also taking a break.

Buyers are also looking hard before they commit. It took about 42 showings to produce each sale in September, against roughly 40 a year ago [1][2]. More tours per sale is the mark of buyers who feel no urgency.

New construction will not fill the gap soon. CMHC reports that national housing starts trended down again in August, with Ontario accounting for the most notable decline [11].

Interest Rates and Bonds: The Bank Holds, the Bond Market Does Not

The Bank of Canada held its policy rate at 2.25 percent on September 2, the seventh consecutive hold since the last cut in October 2025 [3][14]. Governor Tiff Macklem said growth has picked up, with second-quarter GDP up 3.3 percent. He also said upside risks to inflation have increased and that the Bank is prepared to adjust policy as needed [3].

Inflation is the reason the Bank cannot relax. The Consumer Price Index rose 3.0 percent year over year in August, unchanged from July. Gasoline was up 22.8 percent. Excluding gasoline, inflation was 2.4 percent, up from 2.2 percent [6].

For mortgage shoppers, the bond market matters more than the policy rate right now. The 5-year Government of Canada benchmark yield closed at 3.69 percent on September 29, up from 3.54 percent a week earlier and from about 3.2 percent in early August [4]. Lenders price five-year fixed mortgages off that yield, so fixed rates have been rising while the Bank stands still. Variable rates are unchanged, with bank prime at 4.45 percent [5].

Half a point is real money. On a $630,000 purchase with 20 percent down and a 25-year amortization, moving from 4.1 to 4.6 percent adds roughly $140 a month. That is an illustration, not a quote, and the calculator below lets readers run their own numbers.

The next decision is October 28. TD Economics notes it will be the Bank's first chance to publish fresh forecasts that account for the new tariffs, which gives it added weight [5].

Employment: Still the Region's Soft Spot

Real estate, as I have noted in previous ground-breaking posts, needs people to have money and confidence that they will have money in the future.  Kitchener-Cambridge-Waterloo's unemployment rate was 8.2 percent in August, up from 8.1 percent in July. Yes things have improved from 8.7 percent in May, but it remains well above the national rate of 6.4 percent and Ontario's 6.9 percent [7][8].

Despite the numbers above, there is some good news.  The region added about 1,000 jobs in August, with a gain of 2,100 full-time positions offsetting a loss of 1,100 part-time ones. Full-time employment is still 4,000 below its May 2025 peak [8].

Among Ontario peers, only London (8.5 percent) and Oshawa (8.8 percent) are higher. Toronto sits at 6.8 percent, Hamilton at 6.5 percent and Guelph at 7.2 percent [7]. These city figures are three-month moving averages from small samples, so single-month moves should be read with care [7].

One small technical point..  The August survey covered the week of August 9 to 15, before the new US tariffs took effect on August 22 [7][9]. The September jobs report, due October 9, will be the first to capture any tariff effect on local hiring.

Trade and CUSMA: The Shock That Arrived With the Fall Market

The biggest change since midsummer is trade. After talks between Canada and the United States broke down in late August, a 50 percent US tariff on $27.6 billion of Canadian goods took effect on August 22 [3][9]. On August 25, Ottawa announced counter-tariffs on $27.6 billion of US imports, matched dollar for dollar and rate for rate [9].

Ottawa paired the counter-tariffs with a $7.5 billion support package for affected workers and businesses. It includes a $2 billion Canada Strong Diversification Fund and builds on nearly $25 billion in earlier tariff supports [9].

As far as what the Bank of Canada's has said, the affected products represent about 5 percent of Canada's exports to the United States. The Bank expects targeted sectors to be hit hard, without a large direct effect on overall economic activity. Its concern is the uncertainty, which may lead businesses more broadly to delay investment and hiring [3].

That uncertainty is the one that reaches housing. I've said many times, it is the discussions at home about confidence - justified or otherwise- in the future that matters most.   Waterloo Region carries one of the country's larger manufacturing bases, at roughly one in six local jobs [7]. A household that is unsure about next year's paycheque does not book showings. The timing fits: showing growth went flat in August and negative in September, right as the tariffs landed [1]. 

All of this sits alongside the CUSMA joint review that opened on July 1. The agreement remains in force, but the Bank describes the trade situation as fluid, and there is no settled outcome yet [3]. Until there is, expect buyers tied to export industries to stay cautious.

Also Worth Watching

Water capacity. The Mannheim Service Area constraint continues to limit new development approvals across Kitchener, Waterloo and parts of Cambridge. The Region assigned a first 30 litres per second of restored capacity to area municipalities in July, and a side stream filtration system at the Mannheim plant is expected to add 20 litres per second by the end of September [12]. Cambridge adopted its own Water Allocation Policy on July 21, with applications considered in cycles as capacity becomes available [13]. Limited new supply is one reason resale inventory stays tight.

Housing starts. CMHC's six-month trend in national housing starts fell 1.3 percent in August to 244,149 units, with Ontario leading the decline [11]. Fewer starts today means fewer completions in 2027 and 2028.

The October calendar. Four releases will shape the rest of the fall market:

• Mid-October: CREA's national sales figures for September [10]
• October 9: Labour Force Survey for September, the first since the tariffs [7]
• October 16: CMHC housing starts for September [11]
• October 28: Bank of Canada rate decision and updated forecasts [5]

What It Means This Fall

For buyers. Competition has thinned. Fewer people are touring homes than at any point since February, and sellers know it. That is negotiating room. The offset is borrowing cost: fixed rates have moved up with bond yields, so a rate hold is worth securing before shopping seriously.

For sellers. Fewer showings means each one counts more. Pricing to current comparables matters more than it did in the spring, when traffic could cover for an ambitious list price. The good news is on the supply side. With inventory down about 13 percent from last year, a well-priced home is not competing against a flood of alternatives [2].

For owners renewing a mortgage. Variable rates have not moved. Fixed rates have. Anyone renewing in the next few months should watch the October 28 decision and the bond market in the weeks before it.

Conclusion

September is the month the fall market was supposed to begin. Instead, showings posted their sharpest August-to-September drop in five years, and their first year-over-year decline in a year and a half. Sales followed, down 20.7 percent from last September. A trade shock, higher bond yields and a soft local job market all arrived together.

Finally, it is important to keep everything in perspective.   Inventory is below last year's level, median prices are drifting around rather than dropping - March 2022 is not going to happen- , and 2026 remains well ahead of last year on total buyer activity. Again I make this point, what changed is confidence. October's jobs report and the Bank of Canada's October 28 decision will show whether September was a pause or the start of a slower winter.

A good thing to remember in real estate:  If things are really good just wait.  If things are really bad just wait.

Sources

1. BrokerBay, Showing Volume report, Waterloo Region, October 2021 to September 2026 (report generated October 1, 2026)
2. ITSO InfoSparks (ShowingTime), Waterloo Region monthly data by property type: sales, median sales price, homes for sale, months supply of homes for sale, and average percent of last list price (data as of October 1, 2026)
3. Bank of Canada, Monetary Policy Decision Press Conference Opening Statement, September 2, 2026
4. Bank of Canada, Selected bond yields (5-year benchmark, September 22 to 29, 2026)
5. TD Economics, Bank of Canada Interest Rate Announcement, September 2, 2026
6. Statistics Canada, The Daily: Consumer Price Index, August 2026 (released September 14, 2026)
7. Statistics Canada, The Daily: Labour Force Survey, August 2026 (including three-month moving average unemployment rates by census metropolitan area)
8. CREA Statistics, Kitchener-Cambridge-Waterloo Employment Trends
9. Department of Finance Canada, Canada announces targeted countermeasures and substantive support for workers and businesses in response to U.S. tariffs, August 25, 2026
10. CREA, national housing statistics for August 2026 (released September 15, 2026)
11. CMHC, Housing starts and construction data, August 2026
12. Region of Waterloo, Progress updates: Restoring and boosting water capacity
13. City of Cambridge, Water Supply Allocation
14. Bank of Canada, Policy interest rate

Terry Riddoch

If you would like to talk through how any of this applies to a building you own or one you are considering, I am always happy to walk through the numbers.

Terry Riddoch
Real Estate Broker -- Multifamily and Investment Properties, Ontario

Phone: 519 591 1725
Email: [email protected]
Web:www.terryriddoch.ca