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Canada’s housing market lost some steam in December, closing out 2025 on a quieter note. Home sales fell 2.7% from November, according to the Canadian Real Estate Association (CREA). Compared to December 2024, activity was down 4.5%.
While the year ended softly, annual sales held up better than many expected. A total of 470,314 homes changed hands in 2025, a year-over-year decline of just 1.9%. CREA described 2025 as a year with three distinct phases: a first-quarter pause as U.S. tariff uncertainty pushed buyers to the sidelines, a mid-year rally fuelled by lower rates, and a slower finish heading into winter.
"There doesn’t appear to have been much rhyme or reason to the month-over-month decline in home sales in December,” said Shaun Cathcart, CREA’s senior economist. He added that several major markets slowed at once, but for different reasons.
Supply tightened modestly into year-end. New listings declined 2% in December, marking the fourth straight monthly drop, while active listings remained 7.4% higher than a year earlier. Inventories have been drifting lower since May 2025 as demand improved through the middle of the year.
The national sales-to-new listings ratio eased to 52.3%, near historical norms and consistent with balanced market conditions. Months of inventory edged up to 4.5, just under the long-term average of five months.
Prices continued to adjust in December. The MLS Home Price Index dipped 0.3% month-over-month and was down 4% compared to December 2024. Most of the overall softening came from markets in Ontario’s Greater Golden Horseshoe, CREA noted. The actual national average sale price of $673,335 was essentially flat from a year earlier, down just 0.1%.
What economists are watching
"With their weak December showing, Canadian average home prices mirrored sales, and we think that there's limited scope for them to push meaningfully higher over the near-term given the supply/demand conditions that favour buyers in B.C. and Ontario,” noted Marc Ercolao of TD Economics.
"We'd note, however, that price growth is much stronger elsewhere, with near-double digit annual average price gains posted in markets like Saskatchewan, Quebec, and Newfoundland and Labrador in 2025,” he added.
Looking to 2026, CREA expects the spring market to benefit from four years of pent-up demand and lower mortgage rates. "Barring any further major uncertainty-causing events, we should see a more active market this year,” said CREA Chair Valérie Paquin.
December 2025 snapshot:
- Home sales: -2.7% month-over-month
- New listings: -2% month-over-month
- Sales-to-new listings ratio: 52.3% (long-term avg: 54.9%)
- MLS HPI: -0.3% month-over-month, -4% year-over-year
- Average price: $673,335 (-0.1% year-over-year) Months of inventory: 4.5 (long-term avg: 5.0)
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