National home sales in Canada decreased by 1.9% in December compared to the same period the previous year, as reported by the Canadian Real Estate Association (CREA) on Wednesday. This decline marked a year characterized by lower interest rates but heightened economic concerns.
Certain Canadian markets experienced a lack of buyer activity in 2025 due to concerns such as elevated unemployment and uncertainties stemming from the U.S. trade conflict. Despite this, regions like St. John’s, Regina, and Quebec City witnessed significant boosts in both activity and prices. Quebec City notably saw a substantial 17% increase in prices year-over-year, partly attributed to the Bank of Canada’s decision to reduce its key interest rate by a full percentage point in 2025.
During a news conference on Thursday, CREA’s senior economist, Shaun Cathcart, projected a modest 5.1% increase in sales for 2026. Cathcart highlighted ongoing affordability challenges and limited supply in various parts of the country as factors constraining the market. The association anticipates a rise in sales primarily in southern Ontario and British Columbia, which faced challenges in the previous year.
Realtors and economists interviewed by CBC News expressed concerns that many aspiring homeowners are still priced out of the market. Renewed uncertainties surrounding U.S. relations could further deter first-time buyers from entering the market in the coming months.
Two major markets, Toronto and Vancouver, witnessed a notable decline in home sales in December, hitting a 20-year low. Toronto saw 62,433 homes sold in 2025, the lowest level since 2000, while Vancouver recorded 23,800 home sales, a figure even lower than during the 2008 financial crisis.
Although Toronto’s housing market showed signs of improvement at the end of the year, experts like John Pasalis, president of Realosophy Realty, predict a continuation of challenges in 2026. Economic uncertainties triggered by the U.S. trade tensions may impede a significant market rebound in the near future.
Several housing markets in southern Ontario and parts of British Columbia experienced cooling effects, with an influx of new listings leading to downward pressure on prices. For instance, Hamilton’s home sales in December were the slowest since 2010, dropping by 12% compared to the previous year.
Robert Hogue, assistant chief economist at RBC, noted that increased inventory in certain markets has reduced the urgency for buyers to make quick decisions. Conversely, regions like Quebec, the Atlantic provinces, and the Prairies have maintained stable or even robust housing market activity.
Looking ahead, Hogue emphasized that the trajectory of the housing market will be influenced by the broader Canadian economy. Factors such as labour market performance will play a crucial role in determining demand and pricing trends. While interest rate adjustments are not expected in the near term, the Bank of Canada remains vigilant amid uncertainties related to trade agreements.
Amid lingering economic uncertainties, industry experts foresee ongoing challenges in the housing market throughout the year. The market’s direction will likely remain influenced by factors like labour market dynamics and trade negotiations.
