Mortgage rates have now flattened out for quite some time and are back in their normal range that existed before the ultra-low covid rates.

Given this, as well as the fact that prices have softened in some markets across the country, we have to ask ourselves why the housing market still remains soft for the most part.

There are a few reasons why the housing market still lags even though there are still many Canadians that are looking for a home to own and live in. There has been a reduction in immigration meaning less demand for housing. The labour market remains tentative especially with concerns over the inability of our government to strike a trade deal with the US for almost a year now. The longer this drags on the worse it will be for the Canadian economy. Supply is greater than ever yet some buyers are waiting for a market crash which may never materialize. Overall, there still seems to be an air of pessimism over the future of the housing market which is putting it in stall mode.

National prices continue to drop slightly as indicated in the chat below. This is mainly from BC and Ontario.

The opposite is occurring in Quebec, the Prairies, and parts of the East Coast where prices are up year over year and listings are down.

Some statistics for December:

  • Average prices were just over $673,000.
  • This is a decrease of 4.1% and 0.1% year-over-year, respectively.
  • On the average Canadian home:
    a) This puts an 80% mortgage at roughly $538,700.
    b) This is equivalent to over 4 times the average full-time dual-income family’s wages.
    c) This is below OSFI’s and the Bank of Canada’s 4.5x threshold for vulnerability.
  • Canada’s average condo price has dropped 2.1% more value than the average detached home in the last year.
  • Months of inventory has increased again sitting at 4.53 months of inventory on the market.
  • There were 946,600 properties newly listed for sale in 2025 which is the highest number ever recorded.
  • Seasonally adjusted sales were 8.5% below the 10-year average.
  • Sales-to-new-listings ratios slowed down in approximately 70% of markets across the country.​ ​ ​

One more thing to note:

While demand for purchases may have dropped this means that more people may be looking to rent in the next year. It is very difficult to predict where prices will be at the end of the year. A mid-year purchase recovery is likely if mortgage rates stay favourable and trade uncertainty eases. The chart below shows that mortgage debt ratios have dropped from their peak a couple of years ago. This means affordability is coming more in line ​for people that are looking to purchase or even renew their mortgage in the upcoming year.

If you need more information regarding mortgages or if you need any advice on your personal situation please contact our office at 604-556-3893 or email at alex.kotai@ymscanada.ca.

For more information on our mortgage products and your preferred Abbotsford Mortgage Broker please visit our website at www.ymscanada.ca.

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