National home sales in Canada decreased 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 with lower interest rates but increased economic concerns.
In 2025, certain Canadian markets experienced a lack of buyer activity due to heightened unemployment levels and apprehensions stemming from the U.S. trade conflict. However, regions like St. John’s, Regina, and Quebec City saw significant boosts in both activity and prices, especially Quebec City, which witnessed a remarkable 17% price surge year-over-year following the Bank of Canada’s decision to lower its key interest rate by a full percentage point in 2025.
Senior economist Shaun Cathcart of CREA projected a modest 5.1% increase in sales for 2026, highlighting persistent affordability challenges and limited supply as ongoing constraints. Southern Ontario and British Columbia are anticipated to drive most of the sales growth, particularly after facing challenges in the previous year.
Despite these positive trends, industry experts warn that many potential homebuyers still find prices unattainable, and uncertainties surrounding U.S. relations could deter first-time buyers from entering the market in the near future.
In major markets, home sales in Toronto hit a 20-year low in December, with Vancouver also experiencing a notable decline. Although Toronto’s housing market showed signs of recovery, experts suggest that economic uncertainties, particularly related to the U.S. trade war, may hinder a significant rebound in 2026.
The real estate landscape in southern Ontario and parts of British Columbia has cooled off, with an influx of new listings leading to downward pressure on prices. Notably, Hamilton recorded its slowest home sales in December since 2010, reflecting a 12% year-over-year drop.
While some regions like Quebec, the Atlantic provinces, and the Prairies have maintained stable or even robust activity, concerns linger about the impact of economic fears on housing market dynamics. Analysts emphasize the importance of the Canadian economy’s trajectory in shaping future housing trends, with factors like labor market performance influencing demand and pricing stability.
Amid ongoing uncertainties, including potential shifts in interest rates and trade dynamics, market observers anticipate a cautious outlook for the housing sector in the coming months. Economic conditions and trade negotiations are expected to play pivotal roles in determining the resilience of Canada’s real estate market in the face of evolving challenges.