National home sales in Canada dropped by 1.9% in December compared to the same month a year ago, as reported by the Canadian Real Estate Association (CREA) on Wednesday. This decline marked the end of a year characterized by lower interest rates but increased economic concerns.
Certain Canadian markets witnessed cautious buyers in 2025, influenced by high unemployment rates and uncertainties arising from the U.S. trade tensions. However, regions like St. John’s, Regina, and Quebec City experienced a notable surge in both activity and prices. Quebec City, in particular, saw a remarkable 17% price hike year-over-year, following the Bank of Canada’s decision to reduce its key interest rate by a full percentage point in 2025.
CREA’s senior economist Shaun Cathcart projected a modest 5.1% sales increase for 2026, citing lingering affordability challenges and limited supply in various parts of the country as key constraints. The association anticipates a sales boost primarily in southern Ontario and British Columbia, regions that faced challenges in the preceding year.
Despite the positive outlook, real estate professionals and economists interviewed by CBC News highlighted that many aspiring homeowners continue to face unattainable prices. Concerns regarding U.S. relations and economic uncertainties may deter first-time buyers from entering the market in the upcoming year.
In major markets, December witnessed a 20-year low in home sales, with Toronto recording only 62,433 sales, the lowest level since 2000, and Vancouver reporting 23,800 sales, a figure comparable to sales during the 2008 financial crisis. While Toronto’s housing market is showing signs of improvement after a sluggish year, experts like John Pasalis from Realosophy Realty suggest that 2026 may follow a similar trend due to ongoing economic fears and trade war uncertainties.
Southern Ontario and parts of British Columbia experienced a cooling housing market, attributed to an influx of new listings that put downward pressure on prices. Hamilton, for instance, reported its slowest home sales in December since 2010, with a 12% year-over-year decline. Conversely, stable or even active markets were observed in Quebec, the Atlantic provinces, and the Prairies, where housing remains relatively affordable.
Robert Hogue, assistant chief economist at RBC, highlighted that the current housing market conditions reflect a correction after the post-COVID-19 price surge, especially in smaller cities like London, Kitchener, and Waterloo. The direction of the Canadian economy will significantly influence the housing market’s trajectory, with factors like labor market improvements potentially stabilizing demand and prices.
While the Bank of Canada is not expected to adjust interest rates in the near future, uncertainties surrounding trade agreements, such as the upcoming CUSMA renegotiations, could impact market dynamics. Economic uncertainties, particularly related to labor market recovery, are expected to persist throughout the year, influencing housing market trends, according to Hogue.
