Home sales in Canada fell by 1.9% in December compared to last year, according to a report by the Canadian Real Estate Association (CREA), reflecting a year marked by lower interest rates and growing economic concerns.
Some Canadian markets experienced stagnation in 2025 due to rising unemployment. However, markets such as St. John’s, Regina, and Quebec City recorded strong activity and notable price increases, driven by the Bank of Canada’s 1% cut to its key interest rate in 2025.
The Canadian Real Estate Association expects modest sales growth of 5.1% by 2026, with obstacles such as weak affordability and supply shortages continuing in many regions. The recovery is expected to come mainly from southern Ontario and British Columbia after a year that saw a significant downturn.
In December, Toronto and Vancouver recorded their lowest sales levels in decades, affected by economic fears and global uncertainty. Conditions are expected to remain stable or see a slight recovery in 2026, according to John Pasalis of Realosophy Realty.
In southern Ontario and British Columbia, supply increased noticeably, putting pressure on prices. Experts believe the market is undergoing a correction following the sharp rise during the post-pandemic period.
More broadly, the future direction of the market is linked to Canada’s overall economic conditions. Improvement in the labor market could boost demand and stabilize prices, while a weaker economy could lead to further declines. At present, no major change in interest rates is expected, but trade uncertainty and shifts in global markets may create a volatile environment over the coming year.
