Red arrows

The slide continues.

On the heels of the sad stats we brought you in recent days about new home sales and construction, job loss and harakari, comes the latest slop from MLS.

November sales in the two key anglo markets of the GTA and LM both plopped by more than 15%. And that was from 2024 levels, which sucked to begin with. Momentum has died, apparently along with buyer confidence.

“There are many GTA households who want to take advantage of lower borrowing costs and more favourable selling prices,” says head Toronto realtor wizard Elechia Barry-Sproule. “What they need most is confidence in their long-term employment outlook.”

And on the left coast, local board boss Andrew Lis has a similar take: “As the year draws to a close, the data continues telling a story of a market with many buyers patiently waiting and sellers adjusting to market conditions not seen in years. Inventory remains healthy, providing buyers ample choice, which, by contrast, is pushing sellers to accept that pricing must reflect this new reality. Buyers and sellers are striking deals when their expectations are aligned and reflective of the current market – not the market of years ago.”

That’s for sure. Lots of supply. Relatively cheap mortgages. A meaningful drop in prices. Tax incentives to buy. None of that has been enough to save the resale market from the weakest sales in decades, or the new-home sector from virtual collapse.

And look at the regional markets. Just as squirrelly. Sales in Calgary last month dropped 14%. In Victoria, where silly people think they’re immune, the decline was even worse – an 18% drop in offers.

Here’s the scorecard for the largest real estate board:

The average price in Toronto faded just over 6% from last November, which was lower than the November that preceded it. From the market’s zenith in the winter of 2022, the average property has last $294,086, for a drop of 22%.

Not equal yet to the record market correction of 32% (the early 1990s), but getting close.

Supply in both Van and the GTA is falling slowly as sellers give up, but remains extreme by historic standards. In this hunk of southern Ontario there are almost 25,000 available resales (plus 21,000 new homes), while in Vancouver the unsold pile is an astonishing 15,000.

Despite the obvious, realtors are telling buyers that 2026 will be better. Honest. Seriously. We mean it. All good.

“We saw encouraging news on jobs and the broader economy in November,” say Toronto realtors. “If this positive momentum continues, consumer confidence will strengthen, and more people will be in a position to consider purchasing a home in 2026.”

But the tone is more cautious and realistic in Vancouver: “With borrowing costs likely to remain steady into the new year, any uptick in demand will need to arise from a significant change in buyer sentiment. As December is typically among the quietest months of the year in terms of market activity, the prevailing trends suggest we should expect a quiet close to a year marked by considerable uncertainty.”

By the way, the average Van price now sits at $1,123,700, down about 4% from last year. The benchmark for detached is $1,900,600 – off about three hundred grand from the crazy peak. Despite that reduction, only 9.7% of available detached listings sold last month, which means that 90.3% of them didn’t.

What’s next?

“November reports on employment and economic growth were much stronger than expected,” says the Toronto board. “The Canadian economy may be weathering trade-related headwinds better than expected. More certainty on the trade front coupled with positive economic impacts of recently announced infrastructure projects could improve homebuyer confidence moving forward.”

This may be hopium. The Bank of Canada is expected to hold interest rates on pause for all of 2026. As mentioned here, at least a few economists think the cost of money will actually rise in the second half of the year. The latest jobs numbers were better, but the unemployment rate remains stuck above 9% in the GTA, and 8% in Calgary – way above the 6.4% in Vancouver. (The US is now at 4.3%, but counts differently.)

The feds are unleashing a torrent of stimulus money. Personal tax rates have dipped a little. The carbon tax and the cap gains tax hike are history. It’s true that the last quarterly GDP report was far better than expected, and ditto for recent jobs creation. Meanwhile a big drop in newcomers, especially temporary residents, may ease more pressure on rents and therefore investment real estate. And, best of all, this is not America. That nation is a dumpster fire. We, in contrast, are joyous little beavers.

By the way, here’s a more detailed breakdown of prices and sales in the GTA market. See all those red arrows, kids? Will they be green by April?

Click to enlarge. Source: Toronto Regional Real Estate Board

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Source: https://www.greaterfool.ca/2025/12/03/red-arrows/