Four and a half years on, the housing correction is an Ontario and B.C. story
The 2023 rebound was a false bottom. Where do home prices go from here?
After the recent rise in fixed mortgage rates and the expectation that variable rates will follow, the question many home buyers and sellers are asking is whether home prices in Canada will fall further.
The national benchmark home price fell to $651,400 in September, its lowest level since February, 2021, and 22.5 per cent below the March, 2022, high. The national average home price tells a similar story: At $666,538 in September, it was lower than in February, 2021.
Four and a half years after the peak, Canada’s housing correction isn’t over. But the national number hides the real story: This is now mainly a correction in two provinces.
Ontario’s benchmark home price is $736,300, down 26.7 per cent from its peak of just over $1-million. The typical Ontario home has lost about $269,000 in value. B.C. is down 16.7 per cent from its peak, down 4.7 per cent from a year ago. Worse, both have erased the 2023 rebound, which many buyers took as a sign the bottom had passed.
Quebec and Alberta, the other two big provinces, never had a 2022 bust. Alberta peaked later, in March, 2025, and is now only 3.6 per cent below that level. Quebec set a record this April and is still up 1.1 per cent from a year ago, the only annual gain among the four big provinces. Among the six smaller provinces, all but Nova Scotia are up from a year ago.
But momentum is fading almost everywhere. In September, the benchmark fell from the previous month in every province except PEI, though part of that is seasonal.
Given recent housing market activity and rising mortgage rates, I expect Ontario and B.C. housing prices will not rise next year and will most probably fall, possibly reaching their bottom. Home prices in Alberta and Quebec may not rise either.
Not everyone agrees. Ali Salarian, the broker at RE/MAX Success Realty in Mississauga, Ont., expects things to improve once the current renewal wave passes. Owners who locked in five-year rates below 2 per cent in 2021 are now renewing at much higher rates, pushing some to sell, while those who renew next yearalready have rates close to today’s. “Once this listing wave clears, expect gradual growth in 2027,” he said in an interview.
He is not the only one. Desjardins senior economist Kari Norman, for example, expects Ontario’s average home price to rise 2.4 per cent in 2027, even though she anticipates two Bank of Canada rate hikes starting in late October.
Still, the economy is soft and borrowing costs are rising. Don’t be fooled by a good spring market. Benchmark home prices tend to rise in spring and stall in the fall. This year, a January-to-May bounce was followed by four straight monthly declines. The first sign of a bottom will be when annual price declines start to narrow month after month.
Hanif Bayat, PhD, is the CEO and founder of WOWA.ca, a Canadian personal finance platform.