Are Real Estate Prices Dropping in Canada? The Short Answer
Yes, real estate prices are dropping in many Ontario markets. As of December 2025, 15 Ontario regions have experienced year-over-year price declines ranging from 6.4% to 13.2%, with some markets seeing corrections of over $100,000 from peak pricing.
Key Facts:
- Chatham-Kent prices dropped 13.2% ($441,428 to $383,206)
- Oakville-Milton declined 10.1% ($1,170,800 to $1,052,600)
- Durham Region fell 8.8% ($921,682 to $840,959)
- 14 other Ontario markets experienced corrections between 6-9%
However, this is not a uniform national trend. While Ontario dominates the list of declining markets, provinces like Quebec, Saskatchewan, and Newfoundland are seeing price increases.
Where Are Prices Dropping the Most?
Ontario's Top 5 Declining Markets (Year-Over-Year)
1. Chatham-Kent: -13.2% Price Drop
- December 2024: $441,428
- December 2025: $383,206
- Savings: $58,222
- Why: Post-pandemic remote work surge has cooled; local employment fundamentals returning to normal
2. Oakville-Milton: -10.1% Price Drop
- December 2024: $1,170,800
- December 2025: $1,052,600
- Savings: $118,200
- Why: Premium GTA suburbs correcting after outsized 2020-2022 appreciation
3. Huron Perth: -9.5% Price Drop
- December 2024: $587,100
- December 2025: $531,400
- Savings: $55,700
4. Durham Region (GTA East): -8.8% Price Drop
- December 2024: $921,682
- December 2025: $840,959
- Savings: $80,723
- Why: Durham offers GTA access at significantly reduced pricing
5. Kitchener-Waterloo: -8.7% Price Drop
- December 2024: $816,400
- December 2025: $746,200
- Savings: $70,200
Are Prices Dropping in Toronto and the GTA?
Core Toronto: Stable to Slight Decline
Downtown Toronto and desirable core neighborhoods have remained relatively stable, with modest 2-3% declines in some segments. Inventory constraints continue supporting prices.
GTA Suburbs: Yes, Prices Are Dropping
- Durham Region: -8.8%
- Oakville-Milton: -10.1%
- Hamilton-Burlington: -7.4%
- Barrie and District: -6.5%
GTA Exurbs: Significant Corrections
Markets that saw explosive pandemic-era growth are correcting most sharply:
- Kawartha Lakes: -8.1%
- Peterborough: -7.0%
- Northumberland Hills: -6.4%
Why Are Prices Dropping?
1. Interest Rate Impact (2022-2024)
The Bank of Canada raised rates aggressively from 0.25% to 5.0%, dramatically reducing purchasing power and cooling speculative demand.
2. Affordability Correction
Pandemic-era appreciation outpaced income growth by wide margins. Markets are correcting back toward fundamentals.
3. Reduced Investor Activity
Higher financing costs and negative cash flow on most rental properties have pushed investors to the sidelines.
4. GTA Exodus Reversal
The "move anywhere" remote work trend that drove 2020-2022 exurban growth has moderated as return-to-office policies increased.
5. Inventory Normalization
Markets that were severely supply-constrained during the pandemic are seeing more balanced inventory levels.
Are Prices Going to Keep Dropping?
Expert Predictions for 2026
Canadian Real Estate Association (CREA): Forecasts a 2.8% national price increase in 2026, driven by pent-up demand and stable interest rates.
RCIB's Ontario-Specific Outlook:
- Markets that have corrected 8-13% are likely near bottom
- Spring 2026 will bring increased buyer activity
- Core GTA will see modest appreciation
- Suburban corrections may continue modestly with 2-4% additional softening possible
- The opportunity window is narrowing -- best value likely Q1-Q2 2026
What Dropping Prices Mean for Buyers and Sellers
If You Are Buying
A $100,000 price reduction translates to:
- $20,000 less required for down payment (20%)
- $500-600 less in monthly mortgage payments
- $35,000-40,000 less in household income required to qualify
If You Are Selling
- Pricing strategy is critical -- overpricing by even 5% can mean months on market
- Presentation matters more when prices are falling
- Well-presented homes in desirable pockets still command premiums
Should You Buy Now or Wait?
Buy Now If:
- You have found a property in a market that has corrected 8-10%+
- You are in a financial position to qualify comfortably
- You are buying for a 5+ year timeline
- Spring competition would stress your budget or reduce negotiation leverage
Wait If:
- Your financial situation is uncertain
- You are buying purely as a short-term investment
- The specific property or neighborhood does not align with your needs
Markets showing 8-13% corrections are approaching historical norms. With CREA forecasting national price increases and spring activity expected to accelerate, waiting for significantly lower prices may mean missing the actual bottom.
Frequently Asked Questions
Will real estate prices drop in 2026?
Most analysts forecast stabilization and modest increases nationally through 2026. Markets that have already corrected 8-10%+ are likely near bottom.
Are real estate prices dropping in Toronto?
Core Toronto has remained relatively stable (0-3% decline). GTA suburbs like Durham (-8.8%), Oakville-Milton (-10.1%), and Hamilton-Burlington (-7.4%) have seen more significant corrections.
Is now a good time to buy with prices dropping?
If you are buying in a market that has already corrected 8-10%+ and plan to hold 5+ years, current conditions offer strong value before spring activity drives prices back up.
