2025 sees slowest Canadian housing market since 2010, inventory increased

The housing market saw weakened demand in 2025, making it the slowest year since 2010 in terms of home sales.

But industry experts say it’s expected and not particularly a cause for concern.

If you’re a homeowner waiting for the price of your property to return to post-pandemic levels, you may be in for a lengthy wait.

“1989 was the last time that we saw this level of decline. Prices in Toronto went down 19 per cent in 1989 and it took a decade for prices to recover back to where they’d been,” said Steve Pomeroy from the Canadian Housing Evidence Collaborative out of McMaster University.

Chartered Professional Accountants of Canada Chief Economist David-Alexandre Brassard says fueling the market correction is the slowed growth of the country’s population.

“Saying that housing sales will rebound in 2026 and that prices will rebound as well, to me the conditions are not there for that kind of a rebound. We had that push from population growth fueling housing demand, and it’s not going to be there in 2026,” said Brassard.

READ MORE: Toronto housing ends 2025 on downswing, but recovery could come this year: board

Last year the federal government announced its Levels Plan – what it calls a “one-time initiative to recalibrate Canada’s immigration system.” It says the change will help boost the domestic economy and ease housing pressures nationwide.

Fewer people coming into the country means a decrease in demand. And as rental investors sell off their assets, that means the supply increases. That results in a price decrease overall.

“If we’re in a housing affordability crisis, we actually want prices to go down,” said Pomeroy.

In cities like Hamilton, affordability is a big issue, but it’s not a population issue.

In a statement to CHCH News, the city says it expects to reach an estimated population of 820,000 by 2051 — up from the 569,000 recorded in the 2021 census.

However, still on the balancing scale for them, supply and demand — something the city says it’s addressing.

As Cornerstone Association of REALTORS say, the market in Hamilton and Burlington is headed in the right direction.

“I think we’re trending towards a more balanced market, a more level market. Over the past year interest rates have come back down to a regular level, inventory has increased, buyers are now starting to come back off the sidelines into the marketplace. So I’m expecting 2026 to be a good year,” said Nicolas von Bredow, director at Cornerstone Association of REALTORS.

The Canadian Real Estate Association is expected to release its forecast for 2026 and 2027 tomorrow morning.

READ MORE: Canada’s largest provinces score worst on housing policies and outcomes, report says