Canada’s housing market has recently shown notable price declines in several major regions, reflecting a broader slowdown in home values as affordability pressures and weak demand persist. While average home prices nationwide still remain high compared with historical levels, certain cities and markets have experienced deeper drops than others over the past year, underscoring significant regional differences.

One of the most pronounced declines has occurred in Ottawa, where prices fell by roughly 6.3 per cent, marking one of the largest percentage drops among major Canadian markets. This decline outpaced even larger metropolitan areas such as Vancouver, where prices were down by about 5.2 per cent over the same period. These figures suggest that even traditionally resilient markets are feeling the effects of higher borrowing costs and subdued buyer activity.

The housing slowdown comes amid sluggish sales activity and persistent affordability challenges. Across much of the country, the number of home transactions has dropped, inventory levels have increased, and many buyers are taking a wait-and-see approach rather than rushing into purchases. These trends tend to place downward pressure on prices, especially where supply has grown faster than demand.

Experts note that the market’s price correction has shifted from a sharp drop to more of a gradual grind downward, with home values likely to trend lower or remain flat through 2026 unless stronger demand returns. Some analysts describe the adjustment as a slow price correction rather than a dramatic collapse, reflecting the high baseline levels relative to incomes and borrowing costs.

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Local factors also matter. Larger urban centres with tighter rental markets or employment growth may see more price resilience, while areas with less robust demand can experience deeper declines. For prospective buyers, this patchwork of regional results highlights the importance of understanding specific local conditions rather than relying solely on national averages.

Looking forward, the interplay of mortgage rates, employment trends, and housing supply will continue to shape price trajectories. If interest rates ease and demand improves, price declines could moderate. However, without a meaningful shift in these drivers, many markets may continue to see downward or flat price movement, leaving potential buyers with negotiating leverage in certain areas.

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In summary, while Canada’s housing market is not collapsing uniformly, cities like Ottawa and Vancouver have experienced material price drops, and broader price pressures may persist as affordability concerns and weak buyer demand continue into 2026