National home sales in Canada decreased by 1.9% in December compared to the same period the previous year, as reported by the Canadian Real Estate Association (CREA) on Wednesday. Despite lower interest rates in 2025, economic concerns affected buyer activity in some Canadian markets, influenced by factors like elevated unemployment and apprehensions related to the U.S. trade war.
While certain regions experienced subdued demand, markets such as St. John’s, Regina, and Quebec City witnessed notable price surges, with Quebec City observing a substantial 17% price hike year-over-year following the Bank of Canada’s decision to lower its key interest rate by a full percentage point in 2025. CREA’s senior economist Shaun Cathcart projected a modest 5.1% increase in sales for 2026, emphasizing that affordability challenges and limited supply remain significant constraints in many parts of the country.
Anticipating a sales upswing primarily in southern Ontario and British Columbia, CREA highlighted the struggles faced by these regions in the previous year. However, industry experts and economists cautioned that housing prices continue to be unattainable for many potential buyers, with lingering uncertainty over U.S. relations potentially deterring first-time buyers from entering the market in the coming months.
In December, home sales in Toronto and Vancouver hit a 20-year low, with Toronto recording its lowest sales figure since 2000. Realosophy Realty’s president and broker, John Pasalis, noted that while Toronto’s market is transitioning from a sluggish period, 2026 might not bring significant improvements due to persistent economic uncertainties stemming from global trade tensions.
The housing markets in southern Ontario and parts of British Columbia have cooled off, with an influx of new listings contributing to downward pressure on home prices. Notably, Hamilton experienced its slowest home sales in December since 2010, signaling a shift in market dynamics. While some regions like Quebec, the Atlantic provinces, and the Prairies have maintained stable or even vibrant activity levels, economic concerns loom large over the sector’s future trajectory.
Economic fears and uncertainties surrounding post-pandemic price surges have led to market corrections in certain regions, prompting analysts to monitor the housing market’s response to broader economic conditions. The direction of the Canadian economy will play a pivotal role in determining housing market trends, with factors like labor market performance influencing demand and price stability. Despite expectations of unchanged interest rates by the Bank of Canada, trade renegotiations and economic uncertainties could introduce further volatility into the housing market throughout the year.