What The Canadian Housing Market Taught Us in 2025 & What Investors Can Expect In 2026
If you step back and look at Canada’s housing market at the end of 2025, one thing becomes obvious very quickly: there was no single story.
Some markets cooled noticeably, particularly where affordability had already been stretched. Other markets kept moving higher, supported by tighter supply, population growth, or local economic strength. In a few places, conditions barely changed at all.
That kind of uneven performance tends to confuse casual observers, but it creates opportunity for investors who are willing to look past national averages and dig into what’s really happening on the ground.
Using the latest Canada Housing Market data from WOWA, this article breaks down how 2025 actually played out across the country, why results varied so widely by region, and what those differences mean for investors heading into 2026.
A National Market That Slowed, But Didn’t Stall
At a national level, the housing market clearly lost momentum in 2025, but it never slipped into distress.
WOWA data shows the national average home price at approximately $682,219 in November 2025, down about 1.8% from the year before. The benchmark price landed near $664,900, continuing a slow decline that had been taking shape for much of the year.
Sales activity also eased. Transactions were lower than in 2024, with year-over-year sales down roughly 7.6%. At the same time, active listings increased, especially in larger urban markets where buyers suddenly had more options than they’d seen in years.
What’s important is what didn’t happen. Inventory didn’t spiral upward, and the sales-to-new-listings ratio remained in a range that points to generally balanced conditions across the country.
For investors, that combination usually signals a market that’s adjusting expectations rather than forcing outcomes. Deals take longer. Pricing becomes more negotiable. The margin for error shrinks.
Interest Rates Helped, but Behaviour Changed More Than Math
As borrowing costs eased following rate reductions from the Bank of Canada, many expected buyers to rush back in. That didn’t happen.
Mortgage rates came down from their peak, but they stayed high enough to keep affordability front and centre. Instead of triggering a surge in activity, lower rates changed how buyers approached decisions.
Conditional offers returned in a meaningful way. Financing clauses became standard again. Buyers spent more time evaluating deals and were quicker to walk away when pricing didn’t align with value.
For investors, this shift matters as much as any price chart. Properties priced with outdated expectations started sitting longer. Deals that only worked under aggressive assumptions became harder to defend. Meanwhile, properties with strong income fundamentals continued to trade, just with more scrutiny.
The market became less emotional and more practical, which tends to favour experienced investors.
Ontario: A Clear Adjustment in High-Cost Markets
Ontario was one of the provinces where the slowdown showed up most clearly.
WOWA reports the average home price in Ontario at roughly $819,356 in November 2025, representing a year-over-year decline of about 5.6%. The Greater Toronto Area followed a similar pattern, with benchmark prices down close to 5.8% compared with late 2024.
Sales slowed, listings increased, and condo segments faced the most pressure, particularly in areas where new supply continued to come online. Buyers gained leverage, and sellers had to adjust expectations.
Ontario remains Canada’s largest and most liquid housing market. Tenant demand hasn’t gone away. Financing options still exist. What has changed is how forgiving the market is.
Deals that rely on appreciation to offset weak cash flow are being exposed. Investors who focus on income, tenant demand, and neighbourhood-level fundamentals are still finding opportunities. The difference is that precision now matters.
British Columbia: High Prices, Slower Pace
British Columbia followed a similar path, especially in Metro Vancouver.
WOWA data shows benchmark prices declining year over year, with average prices down closer to 6–7% compared with the previous year. Condos felt more pressure than detached homes, although activity slowed across most segments.
Affordability remains the main constraint. Even with some price relief, entry points in BC are still high relative to incomes, which has kept buyers cautious.
For investors, this means BC is increasingly about long-term positioning rather than short-term moves. Rental demand remains strong in many areas, but operating costs are higher and rent growth has slowed. Deals need to be underwritten based on current conditions rather than future expectations.
Quebec: Strength Where Supply Stayed Tighter
Quebec told a very different story in 2025.
WOWA data shows benchmark prices in Quebec rising approximately 6.5% year over year, with Montreal’s average home price increasing closer to 8–9%, even though sales volumes declined.
That combination usually points to genuine demand rather than speculative activity. Supply has remained more balanced, population growth continues to support housing needs, and employment conditions have been relatively stable.
For investors, Quebec offers price resilience that hasn’t been present in some other provinces. At the same time, returns depend heavily on understanding the local environment, from tenant regulations to financing structures. Investors who approach Quebec with a long-term mindset tend to be better positioned.
Prairie and Atlantic Markets: Where Momentum Continued
Several smaller markets continued to perform well through 2025, even as larger provinces adjusted.
WOWA places Alberta’s average home price around $511,217, with modest year-over-year growth supported by population inflows and relative affordability. Saskatchewan recorded steady benchmark gains, reflecting tighter supply in several regions.
In Atlantic Canada, Newfoundland and Labrador saw some of the strongest annual price increases nationally, with certain areas posting double-digit growth. Nova Scotia also maintained positive momentum, supported by limited inventory and steady demand.
These markets don’t always attract national attention, but for investors focused on income and diversification, that can be part of the appeal. Entry prices are lower, competition is lighter, and rental demand is often tied to local employment rather than speculation.
Rental Markets Are Adjusting After Several Tight Years
Rental data shows one of the most important shifts of 2025.
According to WOWA, purpose-built rental vacancy rates rose to about 3.1% nationally, up from roughly 2.2% in 2024. That increase reflects new rental supply coming online and affordability pressures pushing back against rent increases.
In several major cities, asking rents flattened or dipped slightly. That change has affected underwriting assumptions, particularly for investors who became accustomed to strong annual rent growth.
Demand for rental housing remains supported by population growth and immigration. What has changed is the pace, which makes conservative assumptions more important.
Supply Improved, but Unevenly
Housing starts exceeded 259,000 units in 2025, making it one of the stronger construction years on record. A large share of that supply was directed toward rental housing, which has been badly needed.
At the same time, construction costs remained high, labour shortages persisted, and trade-related pressures continued to affect feasibility. In some markets, developers slowed or delayed projects as margins tightened.
For investors, understanding what’s being built locally matters more than national construction totals. Some areas are absorbing new supply without issue, while others are starting to feel pressure in specific segments.
What the Data Suggests for 2026
WOWA’s outlook for 2026 points to a market shaped by stability rather than acceleration.
National prices are expected to remain relatively flat, with continued variation by region. Sales activity may improve modestly as borrowing conditions stabilize, but rates are not expected to fall enough to drive speculative demand.
Mortgage renewals will play a role, particularly for owners moving into higher rates. Immigration continues to support long-term housing demand, especially in rental markets.
Overall, results in 2026 are likely to depend more on execution than timing.
How Investors Are Responding
Investors who are investing in this environment successfully are adjusting how they evaluate deals. Conservative underwriting has become standard. Stress-testing rent and vacancy assumptions is now part of the process. Neighbourhood-level analysis has replaced broad market narratives.
Real estate is being treated like a business again, and that’s usually when better decisions get made.
Final Thoughts
Canada’s housing market in 2025 didn’t move in a straight line. Some markets cooled, others kept moving, and a few barely changed at all.
For real estate investors, that variation is the point. Understanding where momentum has slowed, where it has held, and where it continues is what separates informed decisions from hopeful ones.
The opportunities are still there, but they belong to investors who stay grounded in the data, understand local dynamics, and remain realistic about what the market is offering as 2026 approaches.
