Positive Signs for Canadian Economy: Retail Sales Surge and Home Prices Stabilize in November

Recent economic data indicates a remarkable improvement in local demand indicators in Canada during November, with retail sales experiencing the strongest growth rate in five months, alongside a halt in the decline of new home prices for the first time in eight months, signaling a gradual stabilization in economic activity.

Strong Surge in Retail Sales

According to preliminary estimates, Canadian retail sales increased by 1.2% month-on-month in November 2025, marking the largest rise since mid-year, following a slight decline of 0.2% in October.

The decline in October sales was impacted by labor disruptions in British Columbia, particularly affecting food and beverage stores, where sales fell by more than 10%, along with decreases in clothing, personal care, and gas stations.

In contrast, the recovery in November was led by:

• Furniture, home furnishings, and electronics stores (+1.1%)

• Automobile and parts dealers (+0.6%)

Year-on-year, retail sales saw approximately 2% growth in October, reflecting continued consumer momentum despite previous pressures.

Halt in Home Price Decline

Meanwhile, housing market data showed that new home prices in Canada remained unchanged month-on-month in November, ending an eight-month consecutive decline, following a 0.4% drop in October.

The land price index recorded a slight decrease of 0.1%, while the component of housing prices alone rose by 0.1%, rebounding from a larger drop in the previous month, indicating a beginning of balance between supply and demand in the housing market.

Economic Landscape Insight

The combination of improved consumer spending and stable home prices suggests that the Canadian economy may be on the verge of emerging from the slowdown that has dominated recent months, supported by the easing of temporary factors such as labor disruptions, alongside market anticipation of the monetary policy direction in the coming period.

Markets are closely monitoring these indicators to assess the Canadian economy's ability to maintain momentum, especially amid expectations of a gradual easing of financial pressures if positive data continues into the first quarter of 2026.