Canada’s housing market ended 2025 on a quiet note, with both sales and prices edging down in December, according to the Canadian Real Estate Association (CREA). While the market had shown signs of recovery mid-year, December capped off 2025 with a more subdued tone as buyers remained cautious and inventory levels continued to adjust.
National home sales recorded through Canadian MLS® Systems declined by 2.7% in December compared to the previous month. For the year as a whole, 470,314 residential properties were sold, representing a 1.9% decrease from 2024.
“There doesn’t appear to have been much rhyme or reason to the month – over-month decline in home sales in December, which was simply the result of coincident but seemingly unrelated slowdowns in Vancouver, Calgary, Edmonton, and Montreal,” said Shaun Cathcart, CREA’s Senior Economist, in the report. “For that reason, it would be prudent for market observers to resist the temptation to trace a line from the end of 2025 into 2026. Rather, we continue to expect sales to move higher again as we get closer to the spring, rejoining the upward trend that was observed throughout the spring, summer, and early fall of last year.”
New listings continue to ease
Newly listed properties fell by 2% month over month in December, marking the fourth consecutive monthly decline. With sales falling slightly more than new supply, the national sales-to-new listings ratio edged down to 52.3% from 52.7% in November. This remains in line with long-term norms, suggesting balanced market conditions.
At year-end, there were 133,495 homes listed for sale across Canada, up 7.4% from December 2024, though still 9.9% below the historical average for this time of year. Inventory levels have been trending downward since May, a reflection of the demand surge mid-year, and could tighten further as the 2026 spring market approaches.
The number of months of inventory at the national level stood at 4.5 in December, up slightly from 4.4 where it had held steady since August. The long-term average is five months, with anything below 3.6 considered a seller’s market, and above 6.4 classified as a buyer’s market.
Prices see modest decline
The MLS® Home Price Index (HPI) slipped by 0.3% in December compared to November, echoing the previous month’s decline. This softening may reflect some end-of-year price adjustments by sellers aiming to complete transactions before 2026. Most of the downward pressure on prices came from Ontario’s Greater Golden Horseshoe region.
On an annual basis, the non-seasonally adjusted national HPI was down 4% compared to December 2024. Condominiums and townhomes experienced steeper price declines, while one- and two-storey detached homes showed more resilience.
The national average home price in December was $673,335, essentially unchanged from a year earlier, edging down just 0.1%.
“While we remain in the quiet time of year for a little while longer, the spring market is now just around the corner, and it is expected to benefit from four years of pent -up demand, and interest rates that at this point are about as good as they are going to get,” said Valérie Paquin, CREA Chair. “Barring any further major uncertainty -causing events, that means we should see a more active market this year.”
Looking ahead: 2026–2027 forecast
National home sales are forecast to rise by 5.1% in 2026, reaching 494,512 transactions. The rebound is expected to be broad-based, though the pace of growth may vary by region.
The national average home price is projected to increase by 2.8% in 2026, reaching $698,881. More moderate price gains are expected in provinces like British Columbia, Alberta, Ontario, and Nova Scotia. In contrast, Saskatchewan, Quebec, and Newfoundland and Labrador could see stronger price appreciation, though still slower than the 6% to 8% gains recorded in 2025. In these markets, price growth is expected to moderate to between 3% and 6%.
Looking to 2027, home sales are projected to increase by another 3.5%, bringing the national total to 511,966. Average prices are forecast to rise by 2.3% to $714,991. Saskatchewan and Quebec may once again lead in price growth, while most other provinces are expected to see modest increases in the 1% to 2.5% range. If this holds, it would mark the seventh consecutive year where the national average home price remains close to the $700,000 threshold.
