Canadian home sales fell 2.7 per cent in December 2025 from November, the Canadian Real Estate Association says, closing a year with 470,314 sales, down 1.9 per cent from 2024. December’s national average price was $673,335, down 0.1 per cent year over year. CREA forecasts sales will grow 5.1 per cent in 2026, led by pent-up first-time buyer demand.
A quiet finish to a two-part year
December’s decline was not, in CREA’s reading, a sign of a new downturn. Sales were also 4.5 per cent lower than in December 2024, and new listings fell two per cent from November, the fourth straight monthly drop.
CREA senior economist Shaun Cathcart said in the release: “There doesn’t appear to have been much rhyme or reason to the month-over-month decline in home sales in December, which was simply the result of coincident but seemingly unrelated slowdowns in Vancouver, Calgary, Edmonton, and Montreal.”
The full-year picture explains his caution about drawing a trend line. Sales fell early in 2025 as buyers moved to the sidelines during tariff-related economic uncertainty in the first quarter. Activity then rallied from April, climbing 12 per cent by August, before settling into what CREA calls a holding pattern for the rest of the year. In total, 470,314 homes changed hands in 2025, 1.9 per cent fewer than in 2024.
There were 133,495 properties listed for sale at the end of December, up 7.4 per cent from a year earlier but still 9.9 per cent below the long-term average for that time of year.
Prices were nearly flat, depending on the measure
December’s national average sale price was $673,335, just 0.1 per cent below December 2024. That near-flat reading can mislead if it is used on its own. The average is pulled up or down by which homes happen to sell in a given month, and by expensive markets such as Toronto and Vancouver.
CREA’s Home Price Index, which tracks the price of a typical home and removes much of that mix effect, told a softer story. It edged 0.3 per cent lower between November and December, and was down four per cent compared with a year earlier. The two figures are not in conflict: the average price held steady while the benchmark price of a comparable home continued to ease from the heights reached in 2022.
The 2026 forecast, and why it shrank
CREA expects 494,512 homes to be sold in 2026, a 5.1 per cent increase, and the national average price to rise 2.8 per cent to $698,881. It forecasts a further 3.5 per cent rise in sales in 2027, with the average price up 2.3 per cent to $714,991.
Those numbers come with an important qualifier: they are lower than what CREA expected only a few months earlier. Last fall the association was predicting a 7.7 per cent increase in sales for 2026 and a 3.2 per cent rise in the average price. The trimmed forecast is a measure of how much confidence the tariff shock and a slow recovery took out of the outlook.
The expected rebound is forecast to be driven largely by British Columbia and Ontario, where activity is expected to rise more than eight per cent after Toronto and Vancouver were hit hard by trade uncertainty in 2025. Most other provinces are expected to see gains of less than half that rate, because their sales are already running at higher levels and supply is more constrained.
Rates and first-time buyers hold the key
CREA’s case for a recovery rests on buyers who have been locked out for years. It said pent-up demand, particularly from first-time buyers shut out over the past four years by affordability problems and previously high interest rates, underpins the forecast. Interest rates, it argued, have likely fallen far enough to restore the attainability of home ownership for many, even though affordability remains harder than before 2020.
The Bank of Canada held its key rate at 2.25 per cent last month, after a cutting cycle that began in June 2024 and brought the rate down from five per cent, including one percentage point of cuts last year. Economists expect the rate to stay unchanged for much of this year, with the next decision due Jan. 28.
Cathcart advised against reading December’s dip as the start of a trend, saying CREA expects sales to move higher again closer to spring, rejoining the upward trend seen through the spring, summer and early fall of 2025. Whether that happens depends less on one month’s weather or listings than on whether first-time buyers decide, at current rates and prices, that the wait is over.
