A recent survey of over 1,000 real estate agents across Canada has revealed a significant increase in failed transactions, further straining the country's already slumping housing market. The survey, conducted by Ownright, an Ontario-based company specializing in real estate closings, indicates that financing failures are the leading cause of deal collapses.
Financing Issues Top the List
According to the survey, 34 percent of agents reported that financing failure was the primary reason for failed transactions so far in 2026. Additionally, 38 percent of agents noted that more deals are falling apart due to financing issues compared to two years ago. Client indecision also emerged as a contributing factor, causing delays in many transactions.
Joel Fox, chief operating officer of Ownright Law, explained that buyers are increasingly adding multiple conditions to their offers, providing an easier off-ramp to back out of deals. In some cases, buyers lack the necessary funds on closing day because their purchase depended on the sale of another property that fell through or because the purchase price of that property declined between the agreement and closing dates.
Seller Challenges
On the seller side, some are unable to finalize deals because the sale price would not adequately cover the debt attached to the title of their home. Fox noted that this issue has become more prevalent as property values have fallen and homeowners carry high-interest mortgages, sometimes more than one, registered on title.
Economic and Political Uncertainty
The survey also highlighted broader economic and political factors weighing on the market. Nearly 70 percent of agents said clients were warier of taking on risk compared to pre-2022 levels. Economic worries, including recession fears, were cited by 40 percent of agents as the major cause of hesitation among potential buyers. Employment uncertainty was mentioned by 17 percent, and interest rates by 15 percent.
Geopolitical instability, particularly from the United States, is also impacting deals. Nearly one-quarter of agents reported that U.S. political and economic instability frequently undercut transactions, while 69 percent said it occasionally played a role.
Market Outlook
Fox noted that the calculation of participating in the housing market has become more complicated, with buyers considering broader economic and geopolitical factors beyond traditional metrics like interest rates and average house prices. Average selling prices are down nearly 19 percent since February 2022, and sales have declined 40 percent from their March 2022 peak, according to Canadian Real Estate Association data.
Despite these challenges, real estate agents have mixed views on the market's future. While 43 percent expressed confidence that the market will rebound over the next 12 months, 25 percent are pessimistic, and 28 percent remain neutral. Fox himself does not expect a rebound anytime soon, stating that his firm has consistently believed the market would not recover quickly.
