National home sales in Canada dropped by 1.9% in December compared to the same month a year prior, as per a report released by the Canadian Real Estate Association (CREA) on Wednesday. This decline marked the end of a year that witnessed lower interest rates but increased economic uncertainty.
Certain Canadian markets experienced a slowdown in buyer activity in 2025 due to concerns like elevated unemployment and apprehensions arising from the U.S. trade conflict. However, regions such as St. John’s, Regina, and Quebec City saw a significant uptick in both activity and prices, notably with Quebec City observing a substantial 17% price surge year-over-year, attributed to the Bank of Canada reducing its key interest rate by a full percentage point in 2025.
CREA’s senior economist Shaun Cathcart, in a news conference on Thursday, projected a modest 5.1% sales increase for 2026, highlighting that affordability challenges and limited supply in various areas of the country continue to pose constraints.
Anticipating a rise in sales primarily in southern Ontario and British Columbia, which struggled in the past year, CREA foresees a market pickup in these regions. Nevertheless, industry experts and economists express concerns that prices remain unattainable for many potential homebuyers, with ongoing uncertainties potentially deterring first-time buyers in the coming months.
In December, home sales hit a 20-year low in two major markets: Toronto and Vancouver. Toronto recorded 62,433 home sales in 2025, the lowest since 2000, while Vancouver saw 23,800 home sales, a figure even lower than during the 2008 financial crisis.
Although Toronto’s housing market seems to be transitioning from a sluggish period, John Pasalis, president and broker at Realosophy Realty, predicts a continuation of similar trends in 2026. Economic fears and uncertainties stemming from the U.S. trade conflict may persist, inhibiting a significant market rebound in the near future.
The housing markets in southern Ontario and parts of British Columbia have cooled, driven by an increase in new listings that have exerted downward pressure on prices. Hamilton experienced its slowest home sales in December since 2010, witnessing a 12% year-over-year decline, reflecting a trend of heightened inventory reducing buyer urgency.
Conversely, certain regions like Quebec, the Atlantic provinces, and the Prairies have maintained stable or even robust market activity. Shaun Cathcart noted Quebec City as one of the most undervalued housing markets in North America, alongside other affordable areas like New Brunswick, Nova Scotia, Prince Edward Island, Saskatchewan, and Manitoba.
Robert Hogue, assistant chief economist at RBC, cautioned that the current housing market dynamics in regions with slowed activity should be understood in light of the post-COVID-19 surge in home prices. He emphasized that the market’s future trajectory is closely tied to the Canadian economy’s performance, where improvements in the labor market could bolster demand and stabilize prices.
While the Bank of Canada is not expected to adjust interest rates in the near term, uncertainties persist, especially with upcoming renegotiations of the CUSMA trade pact. Analysts are closely monitoring economic developments, as ongoing uncertainties and labor market conditions could impact the housing market’s direction throughout the year.