You’re on your own

The month was a disaster.

House sales crashed 16% from last September. They cratered 21% from August. Single-family home deals dropped 17%. Condos fell 11%. Inventory swelled further.

“September closed with inventory levels outpacing sales to a degree we haven’t seen in many years,” said the local realtor boss, Fergus Kyne, as he declared that the city had slipped back into a buyer’s market. Apart from the brief pandemic chaos, he said, “this is the first time we’ve seen that since January 2015.”

He’s concerned. “We’ll be watching the data closely over the coming months to see whether this is the beginning of a trend we haven’t experienced in more than a decade.”

On the same day, yesterday, in the same city, Victoria, a top Bank of Canada official, Carolyn Rogers, came to give a major speech on housing affordability.

And speaking of that, the new average benchmark price of a property in that town is now $1,280,100, down a tad from August and only 2% lower than a year ago. Over that same time, the price of a condo actually increased.

Sales down. Listings up. Realtors worried. Prices flatlined.

What’s wrong with this picture? What can fix it?

Rogers’ speech ran to over 3,000 words. She trelayed her personal experiences watching real estate values across Canada and internationally. The Bank of Canada was not responsible for creating a Covid bubble with cheap money, she argued. Blame FOMO, the pandemic and too many immigrants for that. Monetary policy was Goldilockian – not too hot, not too cold but just right.

In fact Rogers is gently warning the country about housing deflation. If prices fall more, in other words, bad things could happen.

“Over a long period of rising house prices, housing became tied to many other things we also care about: like household wealth, financial stability and economic growth,” she said. “Rising prices made housing less affordable, but they also supported household wealth and economic growth. Falling prices may improve affordability, but they also reduce household wealth, slow economic activity and can put stress on borrowers and lenders.”

If you want more affordable real estate, she said, more supply is needed and better regs, but governments need to be careful about creating more demand with dumb policies. As for the central bank, her bank, the goal is singular: keep the lid on inflation. Don’t scare people.

No hints on what that means for rates, but the odds still favour a hike or two in the months to come. But the message is clear from Ottawa: there is probably more economic peril in house prices falling than in swelling. Sorry, kids.

So if the CB is reluctant to change course to make real estate cheaper – and Trump’s trade war has so far only managed to dampen down sales but not prices – what might tip the market into a deeper correction?

A national unity crisis could do that. Lately the US-based financial press has done a glow-up on the twin threats we face from the yahoos in Alberta and the dreamers in Quebec.

Meanwhile, guess who’s watching?

Source: Donald Trump, Truth Social

Of course we know that the cowboy secessionists will have their ass handed to them later this month. And if the PQ wins in Quebec, the leader has ruled out any separation talk until after the orange guy has left office. So there is no crisis looming. Just anxiety.

The bottom line: the central bank is prepared to do nothing about real estate values because it doesn’t want them any lower. You are on your own.

Is anyone surprised?

About the picture: “Hi Garth. Here is a shot of my buddy’s border collie waiting for his owners to catch up on the trail,” writes Pete. “This is in Helliwell park on Hornby Island BC.”

To be in touch or send a picture of your beast, email to ‘[email protected]’.

Source: https://www.greaterfool.ca/2026/10/02/youre-on-your-own/