Should You Buy a House in Canada?

Canada's housing market is at a crossroads. With falling interest rates, mixed price trends, and economic uncertainty, many people are wondering: is now the right time to buy a house in Canada? Let's explore the current house prices, market conditions, and expert insights to help you make an informed decision.

Current House Prices Across Canada

As of September 2025, the national average home price in Canada stands at $676,154, showing a modest increase of 1.8% from the previous month but only 1% higher than a year ago. However, the benchmark home price, which represents a typical home, sits at $682,600, down 3.4% from the previous year.

These numbers tell only part of the story. Canada's housing market is highly regional, with dramatic differences between provinces and cities.

Major City Prices

Toronto remains one of Canada's most expensive markets, though it's experiencing significant price drops. In the Greater Toronto Area, the average single-family home costs around $1,212,000 as of recent data, while condos average $584,200. Prices have fallen by about 5-6% year-over-year, with condos experiencing even steeper declines.

Vancouver continues to be Canada's priciest city for housing. The benchmark home price in Metro Vancouver is $1,142,100, down 3.2% from last year. Detached houses average $1,933,100, townhouses cost around $1,069,800, and apartments sit at $728,800. Despite the high prices, Vancouver has seen consistent decreases over the past year.

Montreal and Quebec City are bucking the national trend. Quebec's housing market is actually the hottest in Canada right now. Quebec City has seen remarkable price growth of 13% year-over-year, while Montreal experienced gains of about 7%. These cities offer better value compared to Toronto and Vancouver.

Regional Breakdown

Atlantic Provinces: Nova Scotia, New Brunswick, and Newfoundland are experiencing strong demand. Newfoundland's average home price is $348,194, up 9.4% year-over-year. New Brunswick sits at $341,101, and these markets remain in seller's territory.

Prairie Provinces: Saskatchewan and Manitoba are showing impressive growth. Saskatchewan leads with benchmark price growth exceeding 10% in several months of 2025. These provinces offer relatively affordable housing with prices in the $300,000-$400,000 range for average homes.

Alberta: Calgary and Edmonton have seen strong markets recently, though conditions are becoming more balanced. Alberta's benchmark prices have remained relatively flat year-over-year, down just 0.4%.

Ontario and British Columbia: These two provinces face the biggest challenges. Ontario's benchmark price dropped 6.7% year-over-year, while BC fell 2.7%. High inventory levels and subdued demand continue to pressure prices downward.

What the Experts Say

Real estate experts from major institutions have weighed in on Canada's housing market outlook.

TD Economics revised its 2025 forecast downward, now projecting a 3.2% drop in average home prices for the year. The bank points to economic uncertainty from US trade tariffs and a weakening job market as major concerns. However, TD expects "a notable rebound" in 2026, with prices potentially rising 4.8% as trade issues resolve and interest rates stabilize.

RBC Economics notes that the housing market faced "significant challenges" in early 2025 due to trade disruptions. They project home resales will decline 3.5% in Canada for 2025, with the first half seeing a 4.1% pullback. However, RBC sees signs of recovery as economic fears ease and lower interest rates take effect.

Royal LePage offers a mixed outlook. While they predict national price growth of 5% for the fourth quarter of 2025 compared to last year, they've revised forecasts downward for Toronto and Vancouver. Royal LePage CEO Phil Soper notes that "demand in the recreational segment remains steadfast," suggesting the cottage market is more resilient than urban housing.

Canadian Real Estate Association (CREA) reports that the market is "roughly in balanced territory" nationally, with a sales-to-new-listings ratio of 51%. Senior Economist Shaun Cathcart states that "with three years of pent-up demand still out there and more normal interest rates finally here, further upward momentum is expected into 2026."

Key Market Insights

Interest Rates Are Falling

The Bank of Canada has been cutting interest rates throughout 2025. This is making mortgages more affordable and encouraging buyers to return to the market. Five-year variable mortgage rates have dropped to around 3.6% with some brokers, down from over 4% earlier in the year. Fixed rates are also declining as government bond yields trend downward.

Supply and Demand Vary Wildly

Canada's housing market isn't one market—it's dozens. Saskatchewan has a sales-to-new-listings ratio of 73%, indicating a hot seller's market. Meanwhile, Ontario sits at just 34%, firmly in buyer's territory. Active listings across Canada have risen to nearly 200,000, up 7.5% year-over-year, giving buyers more choices.

The Housing Shortage Continues

Despite current market softness in some regions, Canada faces a fundamental supply problem. The Canada Mortgage and Housing Corporation estimates the country needs an additional 3.45 million housing units by 2030 to restore affordability. Ontario alone needs 1.48 million units, Quebec needs 860,000, and British Columbia requires 610,000 additional homes.

Immigration and Population Impact

Canada's strong population growth has been a major driver of housing demand. However, shifts in immigration policy may moderate demand in coming years. The CMHC expects "lower immigration and an increase in first-time homebuyers to continue to reduce rental demand throughout 2025-2027."

Economic Uncertainty Looms

Trade tensions with the United States, a weakening job market, and recession fears have dampened buyer enthusiasm. Canada's unemployment rate reached 7.1% in August 2025, and GDP actually shrank in the second quarter of 2025. These economic headwinds are making potential buyers cautious.

Should You Buy Now?

The answer depends entirely on your personal situation and location.

Reasons to Consider Buying:

If you're financially stable with a secure job and plan to stay in your home for at least 5-10 years, current conditions may offer opportunities. Lower interest rates are improving affordability, and in some markets like Toronto and Vancouver, buyer negotiating power is the strongest it's been in years. Inventory levels are high, meaning you have more choices and less competition.

For markets like Saskatchewan, Manitoba, and Quebec, strong fundamentals suggest continued stability or modest growth. If you're looking at these regions, buying now could make sense before prices potentially rise further in 2026.

First-time buyers benefit from recent policy changes making homeownership more accessible. With more normal interest rates returning after the spike of 2022-2023, monthly mortgage payments are more manageable than they were a year ago.

Reasons to Wait:

If you're in Ontario or British Columbia, particularly Toronto or Vancouver, waiting might be wise. Experts predict continued price pressure into early 2026 as supply remains elevated and demand stays soft. You could potentially buy at a better price in six months to a year.

Economic uncertainty remains high. If your job security is questionable or you might need to relocate, waiting for clearer economic conditions makes sense. Nobody wants to buy at the peak only to see prices fall further.

If you're stretching your budget to afford a home, waiting for more rate cuts or further price declines could improve your position. Don't buy more house than you can comfortably afford just because rates are lower than last year.

The Bottom Line

Canada's housing market in 2025 is a tale of two markets. Eastern provinces, the Prairies, and smaller cities are seeing healthy demand and stable to rising prices. Meanwhile, Toronto and Vancouver face oversupply, falling prices, and a clear buyer's advantage.

The national average home price of $676,154 masks huge regional variations. What costs $350,000 in New Brunswick might cost $1.2 million in Toronto or nearly $2 million in Vancouver. This regional diversity means there's no single answer to whether you should buy.

Most experts agree that 2026 will likely be stronger than 2025, with the worst of the market correction potentially behind us. If you're buying your forever home, can afford the payments comfortably, and have found the right property at a fair price, the short-term market fluctuations matter less.

However, if you're hoping for continued price drops in expensive markets, or if your financial situation is uncertain, patience may be rewarded. The market is slowly rebalancing, and buyers have more power now than they've had in years.

Whatever you decide, do your homework on your specific market, get pre-approved for a mortgage, and don't rush. In today's market, being an informed and patient buyer is your greatest advantage. The Canadian dream of homeownership is still achievable—you just need to find the right time, place, and price for your unique situation.