By Robb M. Stewart
OTTAWA--Canada's housing market closed out the year on a weak note as buyers remained sidelined, with resale activity and prices falling again in the final month of 2025
National sales of existing homes dropped 2.7% from the month before, the Canadian Real Estate Association said Friday. Sales on a nonadjusted basis in December were about 4.5% below year-earlier levels.
The market has largely stalled following a recovery in resale activity mid-year, after consumer and business sentiment began the year sharply lower in the wake of the Trump administration's threatened and imposed trade tariffs.
The real estate association's data indicated that benchmark house prices, calculated in a similar fashion to the S&P Cotality Case-Shiller National Home Price Index, declined 0.3% between November and December, similar to the pullback seen the month before. Compared with a year prior, prices were down roughly 4%.
"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, who pointed to coincident slowdowns in cities including Vancouver, British Columbia, Calgary and Edmonton in Alberta, and in Montreal. "We continue to expect sales to move higher again as we get closer to the spring."
Economic activity in Canada has cooled since rebounding strongly in the second quarter of last year, with trade-exposed segments such as manufacturing struggling to recover from the trade dispute between Canada and the U.S. The unemployment rate remains elevated, rising to 6.8% in December despite a recovery in hiring in recent months.
Following a string of interest rate cuts by the Bank of Canada through October, the central bank has held fire at subsequent policy meetings and policymakers had indicated the benchmark rate appears to be about right to keep inflation near a 2% target while providing support for the economy as it works through a structural transition.
The Canadian Real Estate Association said new supply of homes up for sale dropped 2% in December, a fourth straight monthly drop. There were 133,495 properties listed for sale on all Canadian multiple listing service systems at the end of 2025, up 7.4% from a year earlier but 9.9% below the long-term average for that time of year.
"While we remain in the quiet time of year for a little while longer, the spring market is now just around the corner and it is expected to benefit from four years of pent-up demand and interest rates that at this point are about as good as they are going to get," Valerie Paquin, the association's chair, said.
There were 4.5 months of inventory on a national basis at the end of December 2025, up slightly from 4.4 months where the measure had been since August. The long-term average for the measure of market balance is five months of inventory.
Write to Robb M. Stewart at robb.stewart@wsj.com
(END) Dow Jones Newswires
01-15-26 0514ET
