Canadian Housing Market Update: December 2025

November felt like a do or die month for the Canadian housing market.

The Bank of Canada lowered its overnight rate in September and October, shaving a combined 50 basis points off of variable mortgage rates. Variable rates sank as low as 3.45%, and fixed rates weren’t far behind.

Despite the approachable rates and a high number of listings for buyers to choose from, home sales still decreased. On a monthly basis, sales dipped 0.6% in November; year-over-year, they were down almost 11%.

It’s pretty obvious that interest rates are not the determining factor for many Canadian home buyers. If they were, you’d expect a flurry of activity in November, especially after the Bank of Canada signalled that its October rate cut might be the last for some time. Why not qualify at 3.5% and ride that rate for as long as possible?

Maybe it’s because Canadians are feeling too much financial pressure to commit to a mortgage at all.

According to Equifax, long-term credit delinquencies increased significantly in the third quarter of 2025, particularly among younger Canadians.

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In October, 40% of Canadians reported being within $200 of not being able to pay their monthly bills, according to MNP’s Consumer Debt Index.

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It’s hard to imagine someone who’s 90 days behind on their debt payments or living paycheck to paycheck jumping at the chance to sign a 25-year mortgage. And those willing to risk it aren’t likely to be offered a rate that starts with a three.

These realities will keep the housing market in a holding pattern until the spring.

Housing market winners and losers in November

It’s hard to crown any provincial market a “winner” this time around.

Sales increased on a monthly basis in British Columbia, Alberta and Saskatchewan, but the increases were marginal: 154 additional sales in B.C., 174 in Alberta and 46 in Saskatchewan.

The more significant detail might be that more homes sold in Alberta than in B.C.

Aside from Nova Scotia and Prince Edward Island, sales decreases in the remaining provinces were relatively mild, too:

In addition to the affordability crunch discussed above, several of these markets may be subject to exhaustion.

Quebec, Newfoundland and PEI have all had a solid 2025; year-to-date, they’ve posted the largest sales increases of any province. As inventory levels and prices head in opposite directions, it’s natural for sales in these regions to cool.

In Ontario, it’s fair to wonder if buyers are still waiting for the market to bottom out, though there might not be much further for prices to fall.

Sellers will generally only take so much of a haircut on their properties. Once qualified buyers in Ontario realize that current conditions are the new status quo, they won’t have much choice but to take what they can.

Canadian home prices in November

Here’s how prices behaved in some of Canada’s biggest housing markets last month.

All percentages indicate year-over-year changes in the MLS Home Price Index benchmark price, the Canadian Real Estate Association’s preferred home price metric.

As you can see, home prices haven’t collapsed across the country this year. If anything, they’ve proven quite resilient.

That’s something to keep in mind if you’re planning on buying a home in 2026.

The narrative around the housing market has been incessantly gloomy this year, but the overall picture has been influenced by the lack of sales in Ontario and B.C.

If you’re purchasing a home elsewhere, you might be surprised at how firm the prices are and how much competition you encounter.

And if it turns out that the market has hit bottom, it might bounce back faster than you think.