National home sales in Canada declined by 1.9 per cent in December compared to the same period a year earlier, according to a report published by the Canadian Real Estate Association (CREA) on Wednesday, capping a year that saw lower interest rates but heightened economic anxiety.
Some Canadian markets saw buyers stay staunchly on the sidelines in 2025, spooked by elevated unemployment and fears drummed up by the U.S. trade war.
But activity and prices got a healthy boost in markets like St. John’s, Regina and Quebec City —with the latter city seeing a whopping 17 per cent price increase year-over-year — as the Bank of Canada lowered its key interest rate by a full percentage point in 2025.
“It would be prudent for market observers to resist the temptation to trace a line from the end of 2025 into 2026,” said CREA senior economist Shaun Cathcart in a statement.
“We continue to expect sales to move higher again as we get closer to the spring, rejoining the upward trend that was observed throughout the spring, summer and early fall of last year.”
Still, Realtors and economists who spoke with CBC News say that prices remain out of reach for many prospective homeowners, and that renewed uncertainty over U.S. relations might keep some first-time buyers out of the market well into the new year.
Home sales in December hit a 20-year low in two major markets. Just 62,433 homes were sold in Toronto last year (the lowest level since 2000), while Vancouver notched 23,800 home sales, a figure even lapped by the number of homes sold during the 2008 financial crisis.
Toronto’s housing market may be turning the page on a sluggish year, but 2026 is “showing more signs of the same,” said John Pasalis, president and broker at Realosophy Realty.
“If we see an uptick [this year], it’s off of 25-year lows,” said Pasalis, noting that economic fear and uncertainty wrought by the U.S. trade war could continue to influence the housing market, making a significant rebound unlikely any time soon.
GTA homes sales declined in 2025: report
Last year marked a turning point in Toronto’s housing market, as prices started to trend down again following a pandemic-induced boost.
“Now a lot of sellers are thinking, ‘If I wait six months, I might get less money than if I sell today,'” he said. “And that is a very big shift in sentiment.”
More broadly, housing markets in southern Ontario and parts of B.C. have cooled, with an influx of new listings putting downward pressure on home prices. Hamilton home sales in December were their slowest since 2010, according to the region’s Realtors association, having dropped 12 per cent year over year.
“There’s a lot more inventory in those markets. So there’s less urgency for buyers to move quickly,” said Robert Hogue, assistant chief economist at RBC.
Elsewhere — including in parts of Quebec, the Atlantic provinces and the Prairies — activity has been stable, even hot.
Still, Hogue cautions that the current housing market in regions where activity has slowed should be viewed in the context of a post-COVID-19 surge in home prices, when smaller cities in southern Ontario (like London, Kitchener and Waterloo) saw “tremendous growth.”
“What we’re seeing now is a bit more of a partial reversal of those trends. So because those price gains were more significant in those areas, the correction is also a bit more significant,” he said.
Where the housing market goes next hinges partly on the direction of the Canadian economy, according to Hogue. If the labour market picks up, for example, demand could firm up and put a floor on prices; but if the economy proves to be weaker than expected, prices might fall more, he said.
While analysts aren’t expecting the Bank of Canada to move interest rates for the foreseeable future, the central bank has maintained its outlook could change, especially with trade uncertainty heightened by upcoming renegotiations on the CUSMA trade pact.
“We are quite likely to be concerned about the direction of the market throughout a good part of the year, because of all this economic uncertainty lingering and continued questions about the labour market and how rapidly it will improve,” said Hogue.
