Canadian real estate is even cooler than most realize. Since hitting a record high three years ago, real (inflation-adjusted) home prices have fallen sharply, according to data from the US Federal Reserve Bank of Dallas (Dallas Fed). Once thought an invincible and sure bet, Canadian real estate is in the middle of the second-largest price correction ever—and it’s still unfolding, especially compared to how long past downturns took to bottom.
Canadian Real Estate Prices Below 2017 Inflation-Adjusted Peak
Canadian real home prices: Dallas Fed inflation-adjusted indexed quarterly values.
Source: Dallas Fed; Better Dwelling.
Even Canadian real estate prices are in disbelief over how sharp this correction has been. Real home prices moved up a minor 0.15% in Q1 2025, but remain 3.94% lower than last year. After adjusting for inflation, home prices are roughly cheaper than they were in 2017—in relative terms. If only household wages had kept up with inflation since then!
The mild quarter-over-quarter uptick may be a sign of firming, but it’s too early to tell. Since inflation data is often revised with more complete CPI inputs, the most recent quarter is often subject to revision. Calling a bottom is bold, especially since more recent indicators, such as home sales, continue to weaken.
Canada’s Housing Crash Is Already The Second-Largest On Record
Canadian real home prices: Historic corrections from peak to trough in percentage points.
Source: Dallas Fed; Better Dwelling.
What is clear is that Canada is seeing one of its largest real estate price corrections on record. Prices have fallen 24.18% since hitting a record high back in Q1 2022. Still shy of the early ‘80s crash (-31.92%), but it’s already surpassed the one in the early 90s (-21.7%). Many may not have noticed—this correction is unfolding faster than almost any before it.
Canadian Real Estate Bubble Is Collapsing At Record Speed
Canadian real home prices: The change in percentage points and number of quarters since the peak for historical corrections.
Source: Dallas Fed; Better Dwelling.
The current correction is now 12 quarters deep—just three years from peak. Only two were shorter: the 2008 Global Financial Crisis (4 quarters) and the 2017 foreign buyer mini-bubble (10 quarters). The 2008 drop was brief, as Toronto—the largest and priciest market—had only just regained its real peak from the early ’90s, nearly two decades later. The 2017 downturn abruptly ended in late 2019 when the market froze into the pandemic. In hindsight, both were blips.
The only two that compare in scale were longer. The early ’80s crash lasted 14 quarters—remarkably short given the damage. The early ’90s correction dragged on for 26 quarters, as policymakers tried to offset losses with rapid immigration and financial stimulus. Instead of helping, it prolonged the downturn and delayed the reset needed for recovery.
Imagine what this looks like if they used actual inflation.
I bought my first Plex as a (no support) single parent as a sysadmin doing $85k , put down $60k on a $360k , to buy myself today I’d need to put down $240k and a gross of 1/4 mil annually. I don’t know any single parent sysadmin in that pay range.
Meaning it can’t fall much further.
More likely reveals just how crap everyone’s pay has increased since the second-largest correction in history means most of the country is still too expensive for the public.
It cannot be understated just how reckless the past few years have been—it needs another 30% decline to even enter the realm of reality for a healthy country. This is Greece 2.0—any young person with talent is about to flee and we’re going to be overrun with sub-quality labor that didn’t realize how much things have changed.
I own a few duplexes in Montreal and I haven’t seen any drop, it’s not rising as it used to, but 5% on $360k and 5% on 1.2 mil is not the same animal. I still increment in the 5th decimal on a quarterly basis. It’s not the building that got out of control, it’s the land, there’s no reason my municipal eval x5 in 20 years. Those who pretend they will help you are the first responsible for the current problem.
Katoura ta podia sou realtor
Imagine if we used the same model of inflation in the 80s instead of the one we cooked up to mitigate the losses a few months ago?
Those bank loans are absolute junk.
And the common thread in the two worst meltdowns?
A Prime Minister named Trudeau.
It’s bizarre how English Canadians think the senior one “saved” Canada.
Govt policy does impact real world experience. Please note Toronto and Vancouver are not all of Canada. This article does not reflect Alberta realities. Prices here have not crashed like this. In fact Tor and Van stats would be even worse if not moderated by Alberta prices. Demand drives prices. When people want out prices fall. Internal immigration is the canary in the coal mine.
How stupid are Canadians? Led for decades down a debt trap when just across the border in the USA brand new luxury homes sell for less than 400K. Resale houses sell for less than 100K. Condos are essentially worth nothing in Canada. Never get fooled into buying one. They are just glorified apartments or basement suites.
Rent and do your buying in the USA.
I sold everything I owned down south before dumbass 1ier return , dumped all my usd based assets. US is a lame duck.
Shamelessly advertising your business in the comments? Get out of here, no one wants to live in your fascist dumpster fire.
Give it a few more months when trumps policies drive people to financial ruin. Your $400k mansion will be selling for half that so essentially I wouldn’t be too smug over your real estate bragging.
LOL. I work in real estate in Canada. Where is this happening? Not here. Record increase year.
Landlord here ,and yup solid year , people are no closer to qualify for mortgages then they where in the last 5 years. And I’m tired of being the Voldemort of housing
Lol. I have a very hard time believing this nonsense.
You’ll own nothing and be happy. Sad state for those who bought at the peak.
I’m not sure this compares to the other RE “crashes” because peak in 2022 was artificially inflated by the pandemic (low rates) and the exuberance was unsustainable. It was bound to correct.
Liberals ruin everything.0
Ya gotta love idiots
Paying top dollar for pieces of shit.
USA houses cost less than 100K in many States
I have no sympathy for anyone who bought during the peak. They fuelled the fire and they should burn in it.
But there is a catch . . . you have to live in the USA. What was it Trump once said about ‘sh-thole’ countries?
The data in this piece is flawed. House prices have not declined by almost 25% in the past couple of years. That is a ludicrous claim, easily refuted by anyone with access to the internet.
Some people say there is no price decrease in Alberta, or Quebec… This is a Bubble popping, at the cities which the prices were artificially BUBBLED and buildings SOLD with FAKE values. Price drop will continue. A Vancouver home can be %30 more expensive than a similar value of a Seattle home. We know it is still 2 or 3 times more EXPENSIVE.