The Canadian housing market rolled back progress, ending the year worse than 2024. Canadian Real Estate Association (CREA) data shows home prices fell sharply in December. The unusually large drop was accompanied by falling sales and one of the strongest turnouts for sellers on record. The combination suggests the market isn’t firming, but may be kicking off a second leg of corrections.

Canadian Real Estate Prices Enter Second Leg of Correction

Canadian Real Estate Prices: Benchmark (Typical) Home. 

Source: CREA; Better Dwelling.

Canadian home prices experienced unusually steep downward pressure last month. The price of a typical home fell 0.7% (-$4.8k) to $660,300 in December, capping the year 4.0% (-$27,400) lower than last year. Close to one-fifth of the annual drop was just December. It also marked the 4th largest drop for the month in the past 20 years, behind 2008, 2022, and 2023. It’s a little optimistic to call this a recovery when progress has rolled back. 

Canadian real estate prices are on a fresh downward trend, moving lower for seven consecutive months now. They’ve shed 21.6% (-$181,600) since the all-time high, ending last month at a 58-month low. That’s nearly five years.  

Canadian Real Estate Sales Fall, Still Not Back To 2019 Levels

Canadian Real Estate Sales: December.

Source: CREA; Better Dwelling. 

Home sales had a relatively small setback last month. CREA reported 26,077 residential sales in December, down 4.5% from last year. For those looking for a positive, it was the second biggest December in the past 4 years. For those living in reality, this is still weaker than 2019, which is remarkable considering how much the population has grown over those 6 years. 

Canadian Home Sellers Hit The Market: Second Most Listings In 8 Years

Canadian Real Estate Inventory: New Listings, December. 

Source: CREA; Better Dwelling. 

One area that did see growth last month? Inventory. There were 28,899 new listings in December, up 0.8% from last year. Except for 2020, Canada hasn’t seen this many sellers hit the market in December since at least 2017. Rushing to sell in the Canadian winter instead of holding out until Spring may speak to the pressure some sellers are facing, especially in investor-dominated markets like Toronto and Vancouver. 

We’ll dive into a regional breakdown in the coming days, but this isn’t just a big city problem. Canadian real estate is adjusting after a period in which investors were the primary buyer. With end-users largely priced out of the market, prices are likely to grind lower until investors are back or they return to end-user budgets. 

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