Home sales in Canada drop to historic lows in 2025 amid paralysis in the two largest real estate markets

The Canadian housing market witnessed a sharp decline in sales activity during 2025, reaching the lowest levels in more than two decades in major cities, reflecting the ongoing pressures from rising borrowing costs, declining purchasing power, and economic uncertainty.
In the Greater Toronto Area, the number of home sales dropped to about 62,400 transactions only during 2025, the lowest annual level since 2000, according to market data. This figure compares to more than 127,000 transactions in 2021, a decline of nearly 51 percent over four years, despite the significant population growth during the same period.
Mortgage expert Ron Butler said this decline is "unprecedented in terms of size and demographic context," adding:
"Toronto's population today is much larger than it was 25 years ago, yet we are witnessing sales similar to that period, which is very striking."
This recession reflects increasing pressures on homeowners. Hussein Khaddadi, a homeowner in Stouffville north of Toronto, said he tried to sell his property twice in the past two years without success, after buying the home in mid-2022, coinciding with the start of the rapid interest rate hike cycle.

He explained:
"I feel real concern about not being able to cover mortgage payments and living expenses, especially with the mortgage renewal date approaching this summer."
In the Greater Vancouver area, a clear paradox was recorded during 2025, as the number of properties listed for sale rose to the highest level since the mid-1990s, while sales remained at very low levels. Total residential sales reached about 23,800 transactions only, the lowest annual figure in more than 20 years.
Andrew Lis, chief economist at the Greater Vancouver Real Estate Board, said:
"Although sales were the weakest in decades, listing activity remained high, reflecting a large gap between sellers' expectations and buyers' ability."
Despite price declines in both Toronto and Vancouver compared to their peaks in 2022, analysts believe the drop was not sufficient to stimulate demand, especially in Vancouver, which remains the most expensive real estate market in Canada. Butler said even affluent buyers "prefer to wait rather than enter the market."
In May 2025, the Toronto Regional Real Estate Board announced the sale of only 6,244 homes, a decrease of 13.3 percent compared to the same month in 2024, indicating continued weakness until the end of the year.
Jason Mercer, the board's chief market analyst, said the decline in sales continued despite the relatively low interest rates and nominal prices, explaining:
"Borrowing costs and prices have fallen in most sectors, but confidence and purchasing power have not recovered sufficiently."
Experts expect the recession to continue during the first half of 2026 at least, amid ongoing uncertainty about the path of interest rates, slowing economic growth, and debt pressures on a wide segment of homeowners.