After more than 3 years of moving sideways, Canadian home prices picked a direction—down. Canadian Real Estate Association (CREA) data shows sales fell in January, with the trade industry attributing it to winter storms. Sellers didn’t seem to mind the storms either, continuing to brave the conditions to hold open houses, like the gosh darn heroes they are. Oh, and did we mention the sharpest drops in sales weren’t in storm regions, but out in Western Canada where a heatwave sent temps to double-digit highs?
Canadian Real Estate Prices Gave Up On Holding Pattern, Head Towards Hard Landing
Canadian real estate: The unadjusted price of a typical home.
Source: CREA; Better Dwelling.
Canadian real estate prices continue to slide. The price of a typical home fell 0.4% (-$2,300) to $658,000 in January, 5.0% (-$34,400) lower than last year. They’re now the lowest since February 2021, a month shy of setting a new 4 year low.
Home prices have kicked off a second wave of corrections. After the rollercoaster of peaking and plunging in 2022, it appears the market struggled to figure out the direction for over 3 years, trading in a narrow band. The market appears to have made up its mind with the recent sharp plunge, with the second leg correction bringing prices 22.58% (-$191,900) lower than peak. While substantial, prices remain 26.4% (+$137,600) higher than they started the 2020s with, which really highlights just how insane the boom was.
Canadian Real Estate Sales Pullback After Brief Recovery
Canadian real estate: January sales.
Source: CREA; Better Dwelling.
Any sign of the recovery occurring last year has begun to fade, though why is up for debate. There were 22,533 homes sold in January, down 16.2% from last year. It was slightly above 2023, which came in as the weakest January in a decade.
CREA attributes the slow market to adverse weather. “The monthly decline in national home sales was driven primarily by less activity in the Greater Golden Horseshoe and Southwestern Ontario, suggesting that the story was probably more about a historic winter storm than a downshift in demand,” writes CREA senior economist Shaun Cathcart.
That narrative may fly in Ontario, but not in Western Canada that saw record setting warm weather. Especially in Alberta and BC, where both provinces saw double-digit, multi-year temperature highs. Despite the balmy highs reached in Vancouver (13.8°C) and Calgary (16.9°C), both regions saw double-digit declines in home sales. Ontario was actually underrepresented for the drag. It represented a third of the national decline, despite its population and existing home sales typically representing roughly 40% of the national volume.
It was an odd take, but we’ll chalk it up to the medical condition known as OTICU—Ontario is the Center of The Universe. The condition of unknown origin appears to target policymakers and economists. Common side effects are assuming whatever you encountered that day applies to the whole country.
Canadian Real Estate Demand Balance Erodes Further
Canadian real estate: January new listings.
Source: CREA; Better Dwelling.
The, um, “bad weather” that impacted buyers didn’t seem to deter sellers, though. There were 61,850 new listings in January, 6.2% lower than last year but less than half the rate of decline seen in home sales. That’s the second-most listing for Janaury in at least a decade of data, only behind the surge last year.
The shift in demand balance is reinforced further by the sales to new listings ratio (SNLR) at 36.4% in January, 4.4 points lower than last year. That places the market firmly in a buyers’ market, where the industry sees prices falling due to “oversupply.” Even in weak markets, January rarely sees the SNLR this low, as most sellers hit pause until the spring. An inflow of new listings may be a sign this market won’t be firming in the near-term.
Canadian real estate prices continue to fall. Sales are weakening further, and regardless of the impact of weather, it’s clear buyers have the leverage. Whether the market adjusts price expectations in time for spring will likely determine whether or not activity picks up. From the data we’re seeing right now, that doesn’t appear to be the case.
lol. Good catch, CBC didn’t even bother to fact check the narrative.
GVR reported home sales fell 30% in January. I’m pretty sure Vancouver is the second biggest market in Canada?
BC reported 13 new heat records last month, and they’re forecasting it continues right through the winter.
https://vancouver.citynews.ca/2026/01/14/13-new-daily-heat-records-set-in-bc/
btw nice to see Tiffany is back and you guys are returning to your Vancouver roots.
Wow, looks like prices are finally coming down. Maybe I’ll be able to afford a place soon without breaking the bank!
Don’t count on it bud! No one’s going to sell for less than they bought. The board is also cooking the books to make prices seem lower than they are, but you’ll maybe find 1 or 2 homes listed at the price.
We are in the stall before the fall. Vendors attempt to sell at previous high prices or near to it. Buyers watch the price fall and inventory build up and make very low offers anticipating further falls, or just sit on the sidelines. Market freezes as is happening now with very few sales. Then you get a sudden crash, vendors trying to get out as quickly as possible. Buyers on the other hand just laugh and wait until it hits bottom. Recovery for detached in one year or 7 years. Bottom could be 20 to 50% lower than now who knows. As for condos they are unlikely to recover much if at all. Fees particulary in the GTA are beginning to make them unsellable.
No one is going to sell for less than they bought, unless their mortgage goes from 1.9 % to 3.95%. But that aside, if you have purchased in the last 3 years, you are forever locked in as you would lose more than your down payment.
And although there are hundreds of people locked in, there are infinitely more (thousands – boomers), who purchased at a fraction of current prices, and they can and will eventually capitulate.
TICK TOCK, TICK TOCK
Every second of every day: investments are sold for pennies when dollars were paid.
Actually bud, yes, some won’t have any other choice but to sell. This is not some board game, we’re talking real life, with an economy on the verge of collapsing, the debt accumulating, and a real estate bubble who’s about to pop. Might take another year or two, but it’s happening.
I’ve been watching real estate for years and this is nothing new. It always goes up and down. If you can afford to wait, it will eventually go back up.
Even a rate cut here makes these unappealing. Prices need to rise ~30% or rents need to fall about 20% for this to make sense. Only firms getting taxpayer handouts can make the math work at the current level.
Selling the family home soon? Well, I guess this might not be the best time to cash in as prices are falling. But hey, it’ll still be a great investment!
I wouldn’t automatically call it a “bad” time to sell. It really depends on why someone is selling.
If it’s purely to maximize price, then yes, momentum isn’t on the seller’s side right now. But if it’s a life-driven move — downsizing, relocation, estate planning — then timing the absolute top usually matters less than getting the transition right.
Also, markets don’t move evenly. Some segments correct faster, others just stall. A detached home in a stable neighbourhood can behave very differently from a condo in an oversupplied pocket.
The bigger issue right now feels like confidence, not just price. Buyers are cautious, lenders are cautious, and sellers are slowly adjusting expectations. That’s very different from 2022 panic selling.
Long term, housing tends to track income, credit conditions, and population. The “investment” argument only works if those fundamentals support it. We’re in a period where those fundamentals are being tested.
So I wouldn’t panic — but I also wouldn’t assume the 2021 playbook still applies.
WHY DO IDIOTS BUY ANYTHING OVERPRICED IN CANADA?
BRAND NEW LUXURY USA HOUSES COST 400K OR LESS
Why would anyone want to live in a third world country Like The USA. Vast chunks of the population with no medical and a dictatorship with guns.
yeah we don’t want to go bankrupt stubbing a toe, or have to live in fear of getting shot daily. no thanks douche bro.
They don’t buy with hard earned genuine money. Canada welcomes the Fentalyn & black money without any restrictions. So those money is sky rocketing the Canadian houses.
The 22.6% drop from peak grabs attention, but what stands out more to me is the shift in balance.
A 36.4% sales-to-new-listings ratio in January is meaningful. January is typically thin supply because sellers wait for spring. Seeing that many listings relative to sales this early in the year suggests positioning for a tougher spring rather than pent-up demand. That’s a behavioural shift, not just a pricing one.
The 0.4% monthly decline doesn’t look dramatic on its own, but when prices are already 5% lower year-over-year and 22% below peak, momentum matters. Markets rarely correct in a straight line. They grind, stall, and then resume direction once participants accept the new range.
The weather explanation feels secondary. Alberta and BC didn’t have Ontario’s storm conditions and still posted double-digit sales declines. That weakens the “temporary disruption” narrative.
What’s more interesting is that prices remain 26% above where they started the decade. That’s the residue of the 2020–2022 expansion. The question now isn’t whether the boom was extreme — it clearly was — but whether incomes, credit conditions, and employment stability can support even this adjusted level.
A buyers’ market doesn’t mean collapse. It means negotiation power shifts. If employment and credit stay soft, price discovery continues. If labour stabilizes, this could turn into a slow bleed rather than a hard landing.
The spring data will tell us whether sellers adjust expectations or simply withdraw supply.
In reality, there is no money, no jobs in Canada now. Lots of people are leaving Canada. Brokers are sending multiple offers through their friends. Also brokers are selling & buying houses over asking price among themselves to manipulate the market. In this case they are only losing lawyers’ fees. Other than that they don’t lose any money at all as the money is changing hands amongst themselves. Foreign investors’ fentanyl, drug & black money has been blocked by Trump now as such foreign investors program won’t help. BoC Governor Tiff Macklem declared the country’s old economy dead last Wednesday in Toronto, warning of “painful” and permanent restructuring that will take decades. He’s advocating for big gambles he admits may not work, asking households to pay higher prices for a payoff they likely won’t live to see.