Five cities produced surprisingly disappointing sales volumes as we entered 2026, but the Canadian Real Estate Association (CREA) says that it was only a coincidence.
With deal numbers dropping 2.5%-5.7%, the cities of Montreal, Vancouver, Calgary, Edmonton and Ottawa all caught a dose of the pre-2026 blues.
CREA 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.”
However, the Royal Bank of Canada (RBC) said buyers have still not shaken off concerns of persistent affordability challenges, economic uncertainty and a soft jobs market.
Nationally, sales volumes fell 2.7% compared with the November number.
Nevertheless, most real estate agents are confident the market will find its mojo this month and beyond.
A lot of hope is being stored in the re-emergence of first-time buyers thanks to lower interest rates.
Affordability – that is, the price of property paired with ability to secure a sufficient mortgage – remains the most significant challenge for first homebuyers.
However, there is good news in British Columbia and Ontario, where the issue of affordability is most acute.
RBC analysis shows that “buyers have shifted decisively to a position of strength with ample choice allowing them to be selective”.
The MLS House Price Index for Toronto shows a decline of -6.3% in values over the past 12 months. This reflects the fact that prices rose unreasonably steeply in the post-Covid period, and they are still readjusting to align with what the market can afford.
Pockets of southern Ontario are in a similar position to Toronto, including Kitchener-Waterloo (-8.6%), London (-8.3%) and Hamilton (-7.4%).
Affordability is also improving in Vancouver, which saw a -4.5% monthly decline in transactions and also registered a -4.5% fall in annualised values.
Given that some local areas enjoyed price spikes of 50% during the post-Covid frenzy for property, these latest results are marginal adjustments at best. First-time buyers and upsizers all face substantial financial challenges to fulfill their property goals even with the base interest rate at 2.25%.
Calgary, which has enjoyed a well-balanced market, saw its values drop 3.2% for 2025. Inventory is slightly on the high side there, which is reflected in the small decrease in values.
The shining star of value growth is Quebec City, where prices are up 17% for 2025 and grew 3.2% in December alone. Saskatchewan (6.2%) and Manitoba (6.9%) are also performing well and illustrate how the Atlantic region remains in a strong position for owners and investors.
However, when you see a growth rate like Quebec City’s, it doesn’t take very much inventory to tip the scale and send values edging down again.