Subdued December Caps Challenging Year for Canadian Home Resales
A new report from RBC Economics has revealed that Canada's resale real estate market ended 2025 with a "lacklustre finish" as affordability challenges and economic uncertainty continued to weigh on activity throughout December. The January report characterized home resales as "subdued" across most major Canadian markets, marking a disappointing conclusion to what had been a challenging year overall.
Calgary Leads Percentage Declines
Among the major markets analyzed, Calgary experienced the most significant percentage decline in December, with home resales dropping nearly 15 per cent year over year. This represents the steepest decline among the seven major markets examined in the RBC report. Despite this substantial decrease, RBC economists noted that Calgary's market remains balanced and stable, with resales only marginally off from November levels and slightly down from the typically busy spring market.
Price Declines and Market Conditions
The report highlighted several concerning trends across Canada's largest housing markets:
- Calgary prices declined nearly five per cent year over year in December, marking the city's steepest price drop in nine years
- Toronto's composite average price decreased more than six per cent seasonally adjusted, with sales down nearly nine per cent
- Vancouver's December sales were 15 per cent below its 10-year average, with average prices off about five per cent from the previous year
Limited Bright Spots in National Picture
Only Ottawa experienced sales growth in December, with a modest increase of about two per cent. However, this positive development was tempered by a significant 19 per cent increase in new listings in the nation's capital, the highest among the seven major markets studied. This surge in inventory suggests potential future price pressures despite current sales growth.
Market Recovery Stalls
The subdued December performance was particularly disappointing given that many markets, including Vancouver and Toronto, had shown signs of potential recovery earlier in 2025 after two years of slumping activity. RBC economists noted that the December data revealed a "struggling recovery" in several markets, with Vancouver specifically failing to maintain momentum through the end of the year.
Short-Term Outlook
Looking ahead, RBC forecasts that prices may continue to ease in the short-term as more supply enters the market, particularly from new construction. This additional inventory could provide some relief to affordability challenges but may also put downward pressure on prices in markets already experiencing declines. The report suggests that economic uncertainty and ongoing affordability issues will likely continue to influence market dynamics in the coming months.
