September 2026: The Price Decline Narrowed and the Listing Supply Kept Shrinking

Last month the headline number was an 8.8% drop in the average selling price, and most of the August 2026 report was spent explaining why that figure overstated what had actually happened to values. August's data settles the argument, and it settles it in a way worth paying attention to.

Simcoe area REALTORS® reported 657 home sales through TRREB's MLS® System in August 2026, up 1.1% from August 2025 (TRREB, 2026b). New listings fell 11.7% to 1,827, and active listings fell 6.3% to 4,326. The average selling price was $746,303, down 6.2% year over year.

Here is the part that matters. In July, the average price was down 8.8% while the MLS® Home Price Index composite benchmark, which adjusts for property type, size and quality, was down 5.4%. That 3.4 point gap was the mix effect: the average was being pulled down by what happened to sell, not purely by what homes were worth. In August the gap closed. The average is down 6.2% and the benchmark is down 5.83%, at $775,100 (TRREB, 2026b). Four tenths of a point apart.

Two conclusions follow, and I want to be clear about both. The first is that July's headline was indeed overstated, which is what I said at the time. The second is that the underlying decline is real and has been steady, running between 5% and 6% on a quality-adjusted basis in both July and August. The benchmark decline did not improve in August. It widened slightly, from 5.4% to 5.83%. Anyone telling you the market has turned a corner on price is reading the average and not the index.

This is not a composition story. Detached homes accounted for 494 of the 657 sales in August, just over 75% of the market, at an average of $805,352 (TRREB, 2026b). The detached benchmark was $810,600, down 5.75%. When three quarters of your transactions are detached and the detached benchmark is down nearly 6%, the market has repriced. Saying otherwise would be dressing it up.

The supply side is where the more interesting question sits. New listings down 11.7% against sales up 1.1% is a meaningful divergence, and it is the second consecutive month of it. Standing inventory has fallen 6.3% year over year and the months of inventory trend is 6.3 (TRREB, 2026b). TRREB's own read is direct: "If this trend continues, home buyers could experience increased competition, providing support for selling prices" (TRREB, 2026b).

The transaction data describes a functional market rather than a distressed one. Homes sold at 96% of list price and took an average of 42 days, against 41 days a year ago (TRREB, 2026b). Sellers are negotiating. They are not capitulating.

Local labour conditions are part of why buyers are cautious, and they are worth naming rather than glossing over. Barrie's unemployment rate was 7.1% in August, up from 7.0% in July, on a seasonally adjusted three month moving average (The Canadian Press, 2026). That is better than it was earlier in the year, and it is still high enough that a household thinking about a larger mortgage would notice it.

TRREB attributes much of the buyer hesitation to a single file: "Economic uncertainty linked to the trade dispute with the United States and the conflict in the middle east continues to influence home-buying decisions" (TRREB, 2026b). It goes further, noting that buyers "may be concerned about their employment situation, especially if they work in a sector related to exports south of the border" (TRREB, 2026b). That connects directly to the tariff section below, and it is the reason that section exists.

Nationally the picture is softer than ours. CREA reported on 15 September that August sales fell 0.7% month over month and 6.9% year over year on an actual basis, while new listings rose 3.3% (Canadian Real Estate Association [CREA], 2026). Months of inventory held at 4.8 for a fourth consecutive month, against a long term average of 5.0, and the national composite benchmark was flat month over month and down 3.0% year over year. Closer to home, TRREB reported GTA sales down 2.1% and GTA new listings down 14.1% in August (TRREB, 2026a).

So the country added listings in August and we lost them. That divergence is the single most useful thing in this month's data, and it is what the rest of this report is built around.

A note on sources. Simcoe County figures in this report come from TRREB's monthly Simcoe County Market Watch, drawn directly from the MLS® System. My board is the Toronto Regional Real Estate Board, on the PropTx MLS® System. That report is the authoritative record for this area and it is the source I lead with. TRREB's Simcoe County reporting does not extend to Muskoka, Gravenhurst, Bracebridge or Huntsville, so figures for the recreational market come from other sources and are identified individually where they appear. One thing worth carrying into every market report you read: the average price is not the same thing as the value of any particular home. It moves with the mix of properties that sold. The benchmark index is the steadier guide, and where the two disagree, the index is usually closer to the truth.

Read that table twice. Haliburton has 7.3 months of inventory and rising prices. Muskoka has 11.3 months and prices down 7.5%. They are ninety minutes apart and they are not the same market. Anyone quoting a single "cottage country" number is averaging across markets that are moving in opposite directions, and the average will describe none of them.

The Bank of Canada held its overnight rate at 2.25% on 2 September 2026, the seventh consecutive hold (Bank of Canada, 2026a). The rate has not changed since a cut on 29 October 2025. The next scheduled announcement is 28 October 2026, and it comes with a Monetary Policy Report.

The Bank's own framing was deliberately two-sided. It reported that second quarter GDP grew 3.3% after a very weak first quarter, with broad-based gains across consumption, housing, exports and business investment, and it flagged upside inflation risk from elevated oil prices alongside downside growth risk from trade policy (Bank of Canada, 2026a). The July Monetary Policy Report projects GDP growth of 0.7% in 2026 and 1.8% in each of 2027 and 2028, with inflation easing to about 2.5% in the second half of 2026 and settling close to 2% in 2027 and 2028 (Bank of Canada, 2026b).

On inflation, the headline number looks worse than the underlying one. Statistics Canada reported that the Consumer Price Index rose 3.0% year over year in August 2026, unchanged from July (Statistics Canada, 2026). Excluding gasoline it was 2.4%. Gasoline alone was up 22.8%. Shelter costs rose 1.5%, running at half the headline rate, with rent up 2.8%. Ontario came in at 2.4%, the lowest rate of any province.

That combination, a 3.0% headline driven almost entirely by energy, with core measures at 2.0% and shelter at 1.5%, is why the Bank is holding rather than cutting, and it is also why the direction of the next move is genuinely uncertain rather than merely delayed.

On the mortgage side, the market has moved. CREA's senior economist Shaun Cathcart noted on 15 September that "fixed mortgage rates have already increased on higher bond yields" and that on the variable side "a rate hike is not only back on the table for this year but already priced in by markets" (CREA, 2026). Bond yields have been unusually volatile over the past five months (J. Lang, personal communication, September 3, 2026), and the move is already in the rate sheets: between 14 and 18 September the best available five-year fixed rate published by Ratehub.ca rose from 4.09% to 4.24%, and the best available three-year fixed from 3.94% to 4.19% (Ratehub.ca, 2026).

I am not going to tell you what any of that means for your mortgage. I am not licensed to, and the honest answer is that it depends entirely on your situation. What I will say is that the range of plausible outcomes has widened since the spring, and that is a reason to have the conversation with a licensed mortgage professional earlier rather than later in your process, not a reason to do anything in particular with your financing.

This section exists because TRREB puts it at the centre of its own explanation for buyer hesitation, noting that many would-be buyers are waiting for more certainty on the trade relationship with the United States (TRREB, 2026b). If your board names a macro file as the reason its market is soft, the file belongs in the market report.

August was the worst month of this dispute so far. The United States imposed 50% Section 338 duties on a broad range of Canadian goods effective 22 August 2026, and those duties apply whether or not a good qualifies under CUSMA, so the trade agreement provides no shelter from them (Last & Anziska, 2026). Canada's response took effect on 8 September: counter tariffs of 15%, 25% and 50% across more than 700 product lines covering $27.6 billion of United States imports, alongside a $7.5 billion support package for affected workers and businesses (Department of Finance Canada, 2026; Fallico, 2026).

Two further United States measures are dated. A scope expansion broadening the 50% duty to cheese, leather goods, furskins, motorboats, metals, furniture and lighting took effect on 15 September 2026, and outright import bans on Canadian alcoholic beverages, certain dairy products and motorcycles with engines over 800 cc are scheduled for 29 September 2026 (Last & Anziska, 2026).

The tone shifted in the past week without the substance changing. On 12 September the President said a trade deal with Canada could come "fairly soon" (Caruso-Moro & Charron, 2026). On 14 September the Prime Minister responded that he welcomed the comments and that Canada was "ready to sit down" (Van Dyk, 2026).

What this means for local housing is narrower than the headlines suggest, and I would rather be precise than dramatic about it. There is no mechanism by which a tariff on hockey equipment changes what a bungalow in Orillia is worth. What it changes is confidence, and confidence changes timing. A household unsure whether its employer has a viable export business next year does not move house this year. That is the whole of the effect, and it is showing up in exactly the place you would expect: transaction volume that is flat when it should be recovering, and inventory that is shrinking because sellers are also waiting.

There is a second order effect worth flagging. Tariffs and counter tariffs raise input costs, which raises the risk of higher inflation, which raises the prospect of higher borrowing costs. TRREB makes this connection explicitly in its August report (TRREB, 2026b). That is the channel by which a trade dispute reaches a mortgage rate, and it is why the financing section above is less settled than it was in the spring.

There is a single county-wide number in this report, 6.3 months of inventory, and it describes almost nowhere in the county accurately. That is the most useful thing I can tell you this month.

Break August's municipal data into two groups and the split is obvious. In the serviced towns, where most sales are primary residences, Barrie, Orillia and Midland ran between 4.6 and 5.7 months of inventory at 96% to 98% of list price. In the waterfront and rural townships, Oro-Medonte, Severn, Tiny and Ramara ran between 7.0 and 10.1 months at 92% to 96% of list (TRREB, 2026b). Tay is the exception that proves the point: 102% of list, on twelve sales.

Barrie, the county's largest market at 164 sales, sat at 5.1 months of inventory, 98% of list, and 35 days on market. Orillia was tighter still on inventory at 4.6 months, though slower at 51 days, with 47 sales at an average of $704,162 and a median of $610,000. The gap between that average and that median is the tell: a handful of higher-end sales pulled the Orillia average well above where most of the market actually transacted.

Now the water. Tiny recorded 25 sales at an average of $900,952, with 8.8 months of inventory and a 92% sale-to-list ratio, the softest in the county. Ramara had 10.1 months, the highest of any municipality in my core area. Severn sold at 93% of list. These are markets where many purchases are discretionary, and discretionary purchases are the ones that pause when the news is uncertain.

The practical consequence is that the same pricing strategy will not work in both. In Barrie, a correctly priced listing is transacting within about five weeks at close to asking, and in Orillia within about seven. On the water in Tiny or Severn, the seller is competing against roughly eight to nine months of standing supply and should expect to negotiate seven or eight points off list. A seller who prices a Georgian Bay property as though the Barrie market applies will sit, and the sitting itself becomes the problem, because days on market is the first thing a buyer's agent looks at.

This is also why the county average is close to useless as a planning tool for an individual seller. The relevant number is not what Simcoe County did. It is what your municipality, at your price band, in your property type, did.

Two other sources are worth naming here, with their limitations stated plainly, because both get quoted locally in ways that misrepresent them.

Royal LePage put the weighted median price of an Ontario single-family waterfront property at $809,900, a decrease of 5.0% (Royal LePage, 2026). That figure is a full calendar-year 2025 weighted median, published on 26 March 2026. It is not a current figure, not a 2026 figure, and not a year over year change as of today. It gets quoted as all three.

STOREYS reported that Muskoka waterfront months of inventory averaged 17.5 in the first quarter of 2026, with properties averaging 95 days on market, and that the Muskoka waterfront market posted 22 sales in that quarter, down 12% from the first quarter of 2025 (Sliz, 2026). That is a first quarter figure for a market whose first quarter is always its thinnest. It should not be compared against the July 2026 figures in the table of areas outside TRREB's reporting above, and it should not be compared against the seven to nine month range that the same article cites for 2025 across Muskoka, Parry Sound and Haliburton combined, because that is a different period and a different geography.

Aggregator data for individual Muskoka towns is available but should be handled carefully. Zolo reported an average sale price of $565,352 in Gravenhurst across 22 sales, a yearly change of 25.8%, over a rolling 28 day window running 18 August to 15 September 2026 (Zolo.ca, 2026a). For Muskoka Lakes, over the same window, the same source reported an average of $2,686,764 across 26 sales, a yearly change of 20.1% (Zolo.ca, 2026b). Neither of those percentages is an appreciation rate. Each is an average across a couple of dozen transactions in markets where a single trophy sale moves the mean by hundreds of thousands of dollars. Three days earlier the same Gravenhurst window read $681,106 on 19 sales, which is how much a rolling 28 day average can move in less than a week, and Zolo states that around 30% of transactions in any such window have not yet been reported. Neither figure is comparable to the calendar-month TRREB data in the Simcoe County tables above. These figures are included here only because they will be quoted at you, and you should know what they are.