VernumoEveryday economics from official statistics

EconomyCanada edition

Canada house prices: down 3.5% in Q3 2026 while pay rises 3.68%

Canadian house prices were 3.5% lower in the third quarter of 2026 than a year earlier on the OECD index, a smaller fall than the 4.3% drop in the second quarter. Average weekly earnings were up 3.68% over 12 months in August, so pay is still growing while home prices sit below last year's level.

Published 2 min read

  • Q4 2025-3%
  • Q1 2026-4.5%
  • Q2 2026-4.3%
  • Q3 2026-3.5%
Canada · House prices · OECD

Canada House prices →

Home prices are still below last year, but the fall is easing

For a household watching the housing market, the latest reading shows prices still lower than a year ago, though by less than earlier in 2026. The OECD house price index for Canada was down 3.5% over 12 months in the third quarter of 2026. That is a smaller decline than in either of the two quarters before it. F4F3F2

Four quarters: the decline deepened, then narrowed

In the fourth quarter of 2025, the index was 3% below its level a year earlier. The fall then grew larger in the first quarter of 2026, reaching 4.5%, the steepest 12-month drop in the four quarters shown. F1F2

From that low point the yearly decline shrank. It was 4.3% in the second quarter and 3.5% in the third, so the 12-month figure has risen, meaning a smaller fall, in each of the last two quarters. Prices are still lower than a year before, just by a narrower margin. F3F4

Pay kept growing through the summer

Average weekly earnings rose 3.33% over 12 months in May and 3.39% in June, dipped to 3.2% in July, then climbed to 3.68% in August, the fastest of the four months shown. F5F6F7F8

Earnings and house prices come from different statistics and are measured over different periods, one monthly and one quarterly, so they cannot be combined into a precise affordability ratio. What they do show is direction: pay has been growing over 12 months while the OECD house price index has been below its year-earlier level. Consumer prices overall were up 3.09% over 12 months in September, another separate measure, which means part of the pay gain goes to higher everyday costs. F8F4C16

The weakest house price growth in the OECD

In the second quarter of 2026, Canada had the lowest house price growth of the 31 OECD countries with data, on the OECD comparison measure, which showed a 12-month fall of 4.3%. R118R119R120

What it means for buyers, owners and renters in Canada

New homes tell a similar story. The new housing price index was 2.04% lower over 12 months in September 2026, so builders' prices are also below where they were a year ago. C22

Borrowing costs are part of the picture for anyone facing a purchase or a mortgage renewal. The Bank of Canada's policy rate stood at 2.5% at the end of October 2026. The figures describe conditions only; they do not say whether any particular household should buy, sell or renew on certain terms. C23

Renters have not seen the same relief. Rent prices in the consumer price index were up 2.8% over 12 months in September. The job market also matters for anyone relying on wage growth: the seasonally adjusted unemployment rate was 6.5% in September. C24C26

National averages hide a lot

The OECD index is a national, nominal measure and does not show regional differences, so prices in a given city may have moved quite differently. It also gives only the 12-month change, not price levels, so the data cannot show how many years of pay a typical home costs. F4

Earnings data stop at August and house price data at the third quarter, so the two series do not line up exactly. The OECD figure can also differ from Canada's own national release. F8R120

AI analyst view

Leaning up medium confidence next quarterly release (Q4 2026)

Estimate range: -3% to -2%

Why

  • Momentum points to a smaller fall: the 12-month change has improved from 4.5% down in the first quarter to 3.5% down in the third, and house price indexes tend to turn gradually rather than reverse sharply. F2 F3 F4
  • The base for the fourth quarter is a year-earlier figure that was already falling by 3%, which makes a further narrowing of the yearly decline more likely than a renewed slide. F1
  • Wage growth of 3.68% in August supports buying power, while the new housing price index, down 2.04%, suggests the softness is broad but not deepening. F8 C22
  • Canada ranked lowest of 31 OECD countries for house price growth in the second quarter, which leaves room for some catch-up as the decline fades, though it also shows how weak demand has been. R118 R119

What would change this view

  • If the Q4 2026 house price index shows a fall larger than 4.3% over 12 months
  • If the new housing price index falls further below -2.04% in coming months
  • If the unemployment rate rises above 6.5% and earnings growth drops below 3.2%

This is the AI’s own interpretation of the official figures above, not an official forecast. It may turn out wrong.

Scenarios to watch

  • Scenario, not a forecast If the yearly decline keeps narrowing at the pace seen since the first quarter, the house price index could move close to its year-earlier level during 2027, especially if wage growth holds up.
  • Scenario, not a forecast If unemployment rises and pay growth slows back toward its July pace, the easing in the yearly decline could stall and prices could stay well below last year's level.

What to check next

  • The OECD house price index for Q4 2026, to see whether the yearly decline keeps narrowing from 3.5%
  • Average weekly earnings for September onward, after the 3.68% reading in August
  • The new housing price index, last down 2.04% over 12 months
  • The Bank of Canada policy rate, at 2.5% at the end of October 2026
  • Rent prices in the CPI, up 2.8% over 12 months in September

Verified data used in this report

IndicatorValuePeriodSourcesAccessed
F1Canada · House prices-3%Q4 2025OECD
F2Canada · House prices-4.5%Q1 2026OECD
F3Canada · House prices-4.3%Q2 2026OECD
F4Canada · House prices-3.5%Q3 2026OECD
F5Canada · Wage growth3.33%May 2026Statistics Canada
F6Canada · Wage growth3.39%Jun 2026Statistics Canada
F7Canada · Wage growth3.2%Jul 2026Statistics Canada
F8Canada · Wage growth3.68%Aug 2026Statistics Canada
C16Canada · Consumer price inflation3.09%Sep 2026Statistics Canada
C22Canada · New home prices-2.04%Sep 2026Statistics Canada
C23Canada · Central bank policy rate2.5%Oct 2026Bank of Canada
C24Canada · Rent inflation2.8%Sep 2026Statistics Canada
C26Canada · Unemployment rate6.5%Sep 2026Statistics Canada
R118Canada position among OECD member countries by house price growth over 12 months, counted from the lowest (1 = lowest in the OECD)1Q2 2026OECD
R119number of OECD member countries with house price growth over 12 months data for this period31Q2 2026OECD
R120Canada house price growth over 12 months, OECD comparison measure (OECD nominal house price index, 12-month change; can differ from the national release)-4.3%Q2 2026OECD
Other background figures (14)
IndicatorValuePeriodSourcesAccessed
C17Canada · Electricity price inflation3.6%Sep 2026Statistics Canada
C18Canada · Energy price inflation18.95%Sep 2026Statistics Canada
C19Canada · Food price inflation2.18%Sep 2026Statistics Canada
C20Canada · Fuel price inflation27.79%Sep 2026Statistics Canada
C21Canada · Gas price inflation-6.78%Sep 2026Statistics Canada
C25Canada · Housing cost inflation1.75%Sep 2026Statistics Canada
C28Canada · GDP growth1.74%2025World Bank
C30Canada · Unemployment rate6.91%2025World Bank
C31Canada · Fertility rate1.252024World Bank
C32Canada · Share of population aged 65+20.26%2025World Bank
C33Canada · Population growth0.94%2025World Bank
R262Canada position among OECD member countries by population growth, counted from the highest (1 = highest in the OECD)102025World Bank
R263number of OECD member countries with population growth data for this period382025World Bank
R264Canada population growth, OECD comparison measure (World Bank, population growth; can differ from the national release)0.94%2025World Bank

Sources

  • Source: OECD, accessed 2026-11-04 — license
  • Source: Statistics Canada. Reproduced and distributed on an "as is" basis with the permission of Statistics Canada — license
  • Source: Bank of Canada — license
  • Source: World Bank, World Development Indicators (CC BY 4.0) — license

How this report was checked

  • Data: the newest reference period cited is Q3 2026.
  • Figures were collected from the source on
  • Written by an AI model (claude-opus-5-5) using only the official figures listed in this report.
  • Automatic checks passed: every number matches a cited figure, every paragraph names its evidence, and there is no investment advice or copied source text.
  • A separate quality-check model raised concerns, and the report was rewritten once to address them.
  • No person reviewed this report before publication. Automatic checks confirm the numbers, not every interpretation.
Update history
  • 2026-11-04 12:02 UTC — created
  • 2026-11-04 12:02 UTC — approved+published

This analysis was written by AI from official statistics and passed automated checks. Last checked: 2026-11-04

Report an error or a rights issue