National home sales in Canada decreased by 1.9% in December compared to the same month a year earlier, 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 heightened economic concerns.
In 2025, certain Canadian markets experienced a lack of buyer activity, influenced by factors such as elevated unemployment and apprehensions stemming from the U.S. trade war. However, regions like St. John’s, Regina, and Quebec City witnessed significant increases in both activity and prices. Quebec City notably saw a substantial 17% price surge year-over-year following the Bank of Canada’s reduction of its key interest rate by a full percentage point in 2025.
CREA’s senior economist Shaun Cathcart projected a modest 5.1% rise in sales for 2026, acknowledging that affordability and limited supply in various parts of the country will continue to pose challenges. The organization anticipates that the majority of sales growth will occur in southern Ontario and British Columbia, which struggled in the previous year.
Despite these expectations, industry experts and economists interviewed by CBC News noted that many potential homebuyers still face unattainable prices, with uncertainties surrounding U.S. relations potentially deterring first-time buyers in the upcoming months.
In December, home sales in Toronto and Vancouver hit a two-decade low. Toronto recorded 62,433 home sales in 2025, the lowest level since 2000, while Vancouver saw 23,800 home sales, a figure even lower than during the 2008 financial crisis.
Toronto’s housing market, which began to trend downward post a pandemic-induced surge, may continue on a subdued trajectory in 2026. Economic fears and uncertainties linked to the U.S. trade war are expected to influence market dynamics, potentially delaying a significant recovery.
Notably, housing markets in southern Ontario and parts of British Columbia have cooled off, with an influx of new listings exerting downward pressure on prices. For instance, Hamilton experienced its slowest home sales in December since 2010, reflecting a 12% decline year over year.
Robert Hogue, assistant chief economist at RBC, pointed out that regions where market activity has slowed, such as in southern Ontario, should be analyzed in the context of post-COVID-19 price surges. The future trajectory of the housing market will be impacted by economic factors, with the direction of the labor market playing a significant role in determining demand and price stability.
While the Bank of Canada is not expected to adjust interest rates in the near future, uncertainties surrounding trade agreements, particularly the upcoming renegotiations of the CUSMA trade pact, could influence market trends. The housing market is likely to be influenced by economic uncertainties and labor market conditions throughout the year.