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On a seasonally adjusted basis, sales fell 4.3 per cent from November 2025, reversing the modest momentum seen late in the fall. December 2025 sales were the lowest for the month since 2023 and nearly 20 per cent below the 10-year average, underscoring the depth of the slowdown.

Prices weakened further toward the end the year. The average home price dropped 6.3 per cent year over year to $1.127 million in December 2025, while seasonally adjusted prices declined 2.4 per cent month-over-month. Despite the recent pullback, prices have largely remained range-bound since 2023 and are still about 13 per cent below the market peak reached in early 2022.

For the full year, 2025 marked a historic low point for market activity. Total home sales fell 12.5 per cent to 35,350 units, the lowest annual total since the start of the millennium. Average prices declined 3.4 per cent to $1.165 million for the year, a relatively modest correction that stands in stark contrast to population growth in the region, which has increased by roughly one million people — or 50 per cent — over the past 20 years.

Central 1 states the weak performance reflects a confluence of structural and cyclical factors. Elevated mortgage rates and the lingering impact of sharp pandemic-era price gains have strained affordability, particularly for first-time buyers facing downpayment constraints. Broader economic uncertainty, including concerns related to Canada-U.S. trade relations and the risk of job losses in a slow-growth environment, has further weighed on buyer confidence, especially in high-priced urban markets.

Market conditions remain firmly tilted toward buyers. Active listings totalled 18,254 units in December 2025, up 13 per cent from a year earlier, even after easing from recent highs. New listings also rose on a year-over-year basis, while the sales-to-active-listings ratio sat at just 13 per cent — well below the threshold associated with balanced market conditions. Analysts note that buyers have demonstrated little urgency, choosing to wait amid abundant supply and expectations of further price softness.

Price declines have varied by housing type. Quality-adjusted composite measures show prices falling roughly five per cent over the past year, with apartments experiencing the sharpest declines. Condominium home prices dropped nearly six per cent year over year, reflecting excess supply in that segment, while single-family houses and townhouses posted slightly smaller but still notable declines.

Looking ahead, short-term conditions are expected to remain challenging as global uncertainty appears to have increased entering 2026. However, Central 1 see the potential for gradual improvement. A year of interest-rate cuts by the Bank of Canada and relatively stable fixed mortgage rates could entice more buyers back into the market. While inventory remains elevated, analysts caution that once sales activity begins to recover, active listings could be drawn down relatively quickly.

Overall, there could be modest gains in home sales and prices later in 2026, with stronger growth expected in 2027 as new home construction slows and supply constraints begin to re-emerge.

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