Signs that housing market sentiment in Canada is heading south fast came in the latest real estate numbers out Friday.

Canadian home sales fell 1.9 per cent in September from the month before while new listings jumped 6.3 per cent, according to data released by the Canadian Real Estate Association.

The decline in sales was widespread with only a few markets showing gains, said Royal Bank of Canada economists Robert Hogue and Rachel Battaglia in a report on the data.

Even Calgary, the nation’s hottest housing market, posted its first decline in six months.

The biggest retreat of major markets was in Vancouver, said RBC, where home sales fell 5.6 per cent from the month before. While Toronto home sales fell just 1.8 per cent in September, they are now down 22.4 per cent since the spring peak, exceeding Vancouver’s 13.7 per cent slide.

Smaller markets in Ontario took even bigger hits, with sales down 14.5 per cent in the Niagara region and 7 per cent in the Hamilton-Burlington area.

Canada’s housing market has now given back almost 40 per cent of the sales gains it made from January when the Bank of Canada first paused interest rates until June, when it resumed hiking, said Desjardins’ principal economist Marc Desormeaux.

“Despite pockets of strength, it’s clear that Canadian housing market sentiment has soured meaningfully since the spring,” he said.

Home prices are also down for the first time since March with the aggregate MLS Home Price Index slipping 0.3 per cent in September from the month before.

Stephen Brown of Capital Economics said the fall in prices shows how quickly conditions have shifted and the plunge in the sales-to-new-listings ratio suggests more weakness ahead.

“Renewed house price declines are another reason to expect the Bank [of Canada] to cut its forecasts for economic growth and inflation in its October Monetary Policy Report later this month,” said Brown. “All this reinforces our view that the Bank will pivot to interest rate cuts sooner than markets are pricing in.”

There is concern that the surge in homes coming on the market could signal deeper troubles.

New listings have risen 35 per cent since March, the strongest six-month advance outside of the COVID-19 pandemic, said Desormeaux, and the trend “implies that many individuals who bought homes in a lower-rate environment are now struggling with sharply higher borrowing costs.”

If higher interest rates are pressuring more homeowners to sell new listings will continue to climb, said RBC, driving prices down further in Ontario and cutting gains in other markets.

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More bad news for renters. A study out Friday by Rentals.ca and Urbanation said the average rent in Canada reached $2,149 in September, an 11 per cent jump from last year. Rents rose 1.5 per cent from the month before, pushing the rate of rent inflation to a nine-month high.

Vancouver leads the way as Canada’s priciest city for renters, with the average one-bedroom unit listed at $2,976 and a two-bedroom at $3,908. But rent growth in Toronto, another pricey city, “slowed substantially,” which the study said could signal a coming moderation in rent inflation as the economy cools and renters face more affordability constraints. Rental.ca said this was already visible in a sharp rise in shared-unit rentals.

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Today’s Posthaste was written by Pamela Heaven, @pamheaven, with additional reporting from The Canadian Press, Thomson Reuters and Bloomberg.

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