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<\/p>\nWhat is traditionally a quiet time of year in Canada\u2019s housing market was especially subdued in January.<\/p>\n
Last month was the second weakest start to a year since the global financial crisis with home resales falling 5.8% from December, and a steep 16.2% from January 2025.<\/p>\n
Inclement winter weather (including a major snowstorm hitting Ontario and frigid temperatures in other parts of the country) likely exaggerated the softness.<\/p>\n
But, signs of buyer hesitation have been visible since fall when an emerging recovery stalled in the face of persistent affordability challenges, economic uncertainty, and slack in the job market.<\/p>\n
Sellers braved the elements<\/p>\n
Perhaps, more noteworthy is the fact sellers didn\u2019t seem bothered by weather disruptions.<\/p>\n
More put homes for sale, boosting new listings by 7.3% from December across Canada.<\/p>\n
This added more inventory for buyers to choose from. Active listings climbed 4.5% from a year ago with larger increases in Ontario and British Columbia where activity has slumped the most.<\/p>\n
Home prices fall at accelerated pace<\/p>\n
Buyers are using stronger bargaining position to extract price concessions. That resulted in the national composite MLS Home Price Index falling 0.9% from December\u2014representing the 14th straight monthly drop and steepest since late-2023.<\/p>\n
Ontario and B.C. account for most of the price weakness in the country, and saw the depreciating trend accelerate in January. Annual decline in the MLS HPI reached -7% in Ontario (compared to -5.7% in December), and -4.9% in B.C. (-4% the previous month).<\/p>\n
Toronto (-8.1%) and Vancouver (-5.7%) experienced significant depreciation in the past year though smaller markets like Hamilton (-9.8%), Kitchener-Waterloo (-9.2%), London (-8.4%), Niagara region (-8.3%) and Fraser Valley (-7.1%) recorded larger declines.<\/p>\n
Downward prices are also present in Alberta where the MLS HPI fell 3.2% and 0.5% from a year ago in Calgary and Edmonton, respectively. A wave of supply has played a big role in the provincial market story since the start of 2025.<\/p>\n
Most regions outside Ontario and B.C. holding up<\/p>\n
Housing market conditions elsewhere generally remain balanced despite softening somewhat in January.<\/p>\n
Home prices continued to rise in Regina (5.5% from a year ago), Saskatoon (4.3%), Winnipeg (5.6%), Montreal (5.7%), Quebec City (14.8%), Moncton (11.8%), Fredericton (3.1%) and St. John\u2019s (9.3%).<\/p>\n
The MLS HPI, however, is now below where it was a year ago in Ottawa (-1.9%), Saint John (-3.7%) and Halifax (-0.7%), mainly due to sharp increases in listings.<\/p>\n
Gradual, uneven recovery remains our base case scenario<\/p>\n
We expect the housing market recovery to get back on track once weather disruptions subside, and as confidence rebuilds.<\/p>\n
Past interest rate cuts, brightening job prospects and improving affordability will help unlock some pent-up demand that has accumulated in recent years.<\/p>\n
Still, this is poised to be a gradual process with diverging regional trends persisting through most of 2026.<\/p>\n
We see higher inventories sustaining\u2014or possibly intensifying\u2014downward price pressure in Ontario and B.C. near term, while tighter supply-demand supports further modest appreciation in most other regions.<\/p>\n
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