Hunkered Down for Winter
Canada’s housing market remained balanced overall heading into the quiet depths of winter, with soft sales activity and prices still correcting in some markets, while others hold firm. Indeed, resale sales volumes look to be running at very ‘normal’ levels, consistent with mortgage rates back around neutral and national prices very stable. These conditions look to continue heading into 2026.
Existing home sales dipped 0.6% in seasonally-adjusted terms in November, and were down 10.7% from year-ago levels. Year-to-date sales are down 1.8% from a year ago, with one month to go. That stability masks much weaker activity in areas around Vancouver, Calgary and parts of Southern Ontario, while markets in Quebec and Atlantic Canada have posted solid increases. New listings dipped 1.6% in the month (seasonally adjusted), and were down a modest 2.0% from a year ago. That allowed the sales-to-new listings ratio to improve slightly to 52.7%, reflecting very balanced overall national conditions.
Balanced conditions have left the national benchmark price effectively flat since the spring. On a seasonally-adjusted basis, prices were down 0.4% in November and 3.8% from a year ago. The market has transitioned from a steep correction (prices are still more than 17% below peak levels) to a long and slow grind, and we suspect that will continue in 2026 with little to spark the market.
In a separate release, Canadian housing starts rose to 254k annualized units in November from 232k in the prior month. That leaves starts through the first 11 months of the year averaging a 254k annualized pace, impressive given the soft conditions in the resale market. We’ll just reiterate that this firmness is entirely a rental story. Across the CMAs, starts for homeownership and condos have slumped to just over 100k in the latest 12 months, the lowest level since early 2010 (i.e., coming out of the Great Recession). However, rental starts have accelerated above 100k as past market conditions and CMHC-led incentives have filled the supply pipeline. Is it rare to see the country building more rental supply than ownership supply? Yes, very.
Here’s a quick rundown of local market conditions:
Southern Ontario is still the weak spot, but conditions are getting less bad (outside the new condo space). New condo sales have all but dried up, investors are absent and the resale market is still struggling. Apartment prices (some double-digit year-over-year declines) are faring worse than single-family, but the latter are still getting pressured by an affordability adjustment.
Vancouver and some other markets across B.C. remain soft with elevated inventories, but they’ve become less-so in the second half of the year. Vancouver is in balanced market territory with the sales-to-new listings ratio at 42%, but both condo and detached prices are down 4% to 5% from a year ago.
Markets in Quebec and further east remain tight almost across the board. Price gains in those regions are solid, although slowing, led by a 12.5% y/y jump in Quebec City, 5.7% y/y in Montreal and 5% y/y in Halifax.
Calgary has balanced out after a strong run, with a lot of the compelling affordability/investor arbitrage (i.e., from Toronto to Calgary) now priced out. Sales are down 13% from a year ago, and prices are off 3.4%. Edmonton and the rest of the Prairies remain firmer.