The Canadian market received an unexpected and unwanted surprise as it ended 2025, with home sales dropping 2.7% month-over-month.
The disappointing performance meant total sales for the year finished 1.9% off the 2024 figure – an illustration of the concerns Canadians still hold for the economy and ongoing tariff threats of the US.
Last year, we sold 470,313 homes, according to data from the Canadian Real Estate Association (CREA), which is predicting a rebound in sales and values for this year and 2027.
The CREA appears perplexed by the December result. Its Chief Economist, Shaun Cathcart, said: “There doesn’t appear to have been much rhyme or reason. (It) was simply the result of coincident but seemingly unrelated slowdowns in Vancouver, Calgary, Edmonton and Montreal.”
He continued: “It would be prudent for market observers to resist the temptation to trace a line from the end of 2025 into 2026. Rather, 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.”
So, while the Canadian real estate sector might not have entered 2026 with momentum, better times are forecast for buyers and sellers alike.
This is certainly a good time for buyers given the number of sales came in 4.5% lower than for December 2024. That means many sellers will be eager to cut deals in the first 12 weeks of this year.
The MLS Home Price Index (HPI) dipped 0.3% month-over-month. The CREA said the actual national average sale price was virtually unchanged (-0.1%) on a year-over-year basis.
In the sellers’ favour is the fact newly-listed properties fell 2% month-over-month, thus giving buyers slightly less choice and weaker bargaining power. That was the fourth consecutive monthly drop in the number of properties for sale.
There were 133,495 properties listed on Canadian MLS® Systems at the end of last year, up 7.4% from a year earlier but 9.9% below the long-term average.
Valérie Paquin, the CREA Chair, said: “The spring market is now just around the corner, and it is expected to benefit from four years of pent-up demand, and interest rates that at this point are about as good as they are going to get.”