Canadian Housing Market Update: January 2025

December 2025 was another blah month for Canada’s embattled housing market.

Home sales were down for the second month in a row, following up November’s 0.6% month-over-month decline with a more pronounced dip of 2.7%. Year-over-year, sales were 4.5% lower than in December 2024.

On a monthly basis, sales activity fell in seven provinces, including several that had been on a tear for much of 2025: Saskatchewan, Manitoba, Quebec and Newfoundland. When sales fall by multiple percentage points in some of the country’s most affordable markets, it begs the question: Is this anything?

To answer that as succinctly as possible: No, but maybe also probably yes.

On one hand, you could attribute some of the decrease to basic seasonality — the holidays take up a lot of bandwidth, and it was a cold, snowy December for much of the country. Viewing houses becomes less of a priority when your car’s under two feet of snow.

From this perspective, the market should thaw at least somewhat come spring.

But there’s likely another factor at play. Even though conditions seem to be tilted in home buyers’ favour — flat or softening prices in dozens of markets, variable mortgage rates around 3.5% — they’re still unable or unwilling to become homeowners.

That could be the result of growing debt challenges, eroded down payment savings or the perceived risk of buying a home when Canada’s involved in a trade war.

It’s impossible to know with any certainty why people bought fewer homes in December. But if it’s the result of compounding financial stress, sales can’t reverse course until buyers are on firmer footing.

Housing market winners and losers in December

When the economy’s in a funk, it makes sense that buyers gravitate to markets that present less risk. So it’s no surprise that monthly increases in home sales were limited to three of Canada’s more affordable provincial markets: New Brunswick, Nova Scotia and Prince Edward Island, none of which recorded an average selling price over $500,000 last month.

The increases weren’t exactly stunning, though: 23 additional sales in New Brunswick, 15 in PEI and 62 in Nova Scotia. So we’re using the term “winners” loosely here.

December’s decreases were generally modest, too:

December was hardest on Quebec (433 fewer transactions) Alberta (367 fewer transactions) and Ontario (227 fewer). No other province saw declines in the triple digits.

Canadian home prices in December

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 didn’t collapse across the country in 2025. Outside of Canada’s most expensive markets, they proved 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 was incessantly gloomy last year, but the overall picture was influenced by the lack of sales in Ontario and B.C. Try to ignore the national stats when you’re buying a home. Focus solely on the market you’re buying in and get advice from local experts.

Just how bad was 2025?

Here’s the thing: home sales in Canada last year were down by only 1.9% versus 2024. Considering the obstacles buyers had to climb over — a trade war and the rising cost of living chief among them — the Canadian housing market didn’t fare too badly.

Year-over-year, sales dropped in four provinces — B.C., Ontario, Alberta and Nova Scotia — and sales in Nova Scotia were down by only 0.1%.

The national average price was relatively steady last year, too. Ending 2025 at $679,543, it was only 1.1% lower than in 2024. At the provincial level, only B.C. and Ontario saw their average prices decline last year.

Add this all up and it’s clear that the Canadian housing market has not collapsed. If anything, it’s proven surprisingly resilient. Canadians still want homes of their own. If economic conditions shift in their favour in 2026, they’ll buy a pile of them.