Canadian real estate is falling faster than anywhere else in the G7, yet it remains one of the frothiest markets in the group. Bank for International Settlements (BIS) data shows real (inflation-adjusted) home prices dropped across all but two G7 countries in Q4 2025, the latest common quarter. Despite Canada’s sharp correction, it still lays claim to the title of the second-highest price growth since 2010.
Canadian Real Estate Is Leading The Way Lower
Indexed value of real home prices across the G7.
Source: BIS; Better Dwelling.
Canada recorded the sharpest quarterly decline in the G7, with home prices falling 2.1% in Q4 2025. It was followed by Japan (-1.5%), Germany (-0.3%), France (-0.2%), and the U.K. (-0.2%). The only countries with positive moves were the U.S. (+0.4%) and Italy (+1.5%), leaving a wide gap from leader to laggard.
That weakness carried over into annual growth, where Canada again led the group lower with a 5.5% drop from a year prior. The only other G7 countries to report negative annual growth were the U.S. (-1.7%) and the U.K. (-1.1%). The remaining four posted gains, though only Italy (+2.9%) and Japan (+2.3%) saw material growth after inflation.
Canadian Home Prices Saw Explosive Growth From 2010 To Peak
G7 home price change from 2010 to each country’s peak.
Source: BIS; Better Dwelling.
Canada leading the group lower isn’t a surprise—it led the way higher by a wide margin. From 2010 to its Q1 2022 peak, Canadian real home prices surged 98.6%. That growth was over 50% higher than the next closest markets: the U.S. (+61.1%, peaking in Q4 2024) and Germany (+60.6%, peaking in Q4 2021).
Baseline-to-peak gains were far more modest across the rest of the G7: Japan (+24.0% in Q1 2025), the U.K. (+22.4% in Q3 2022), and France (+12.8% in Q3 2022).
The weird exception is Italy (+0.3%), where prices actually peaked back in Q3 2010—putting its recent 1.5% quarterly lead into clear context, eh?
Canada Leads Way Lower, Not One G7 Country Is At Its Peak
G7 home price change from peak to Q4 2025.
Source: BIS; Better Dwelling.
Canada is also leading the way lower from its peak, plunging 28.4% from Q1 2022. It is followed by Italy (-24.3%), which is still trying to recover a peak it hit roughly 15 years ago. Only two countries remain within spitting distance of their record highs: Japan (-2.1%) and the U.S. (-1.7%).
G7 Home Prices From 2010 to 2025
Canada is no longer the frothiest market in the G7. That honour has been claimed by the U.S., where prices climbed 58.3% from 2010 to Q4 2025. However, even with Canada’s sharp correction, prices have still beaten inflation by 42.3% over the same period, securing its spot as the second frothiest market. From there, it’s a steep drop to Germany (+29.3%) in third place, followed by Japan (+21.4%), the U.K. (+10.3%), and France (+0.1%).
The only country where home prices failed to keep pace with inflation is Italy, where they sit 24.1% lower than in 2010. In nominal terms, Italian prices are exactly where they were back then—meaning the entire decline is simply the result of inflation eating away at the value.
A sharp correction makes for great headlines, but zoom out and the reality is clear: Canada isn’t experiencing a collapse—it is just slowly letting the air out of a historic, decade-long bubble. Whether the market is actually correcting also depends on where you are. The national figure is lower, but only two provinces have seen a significant correction, while most printed fresh highs last month.
