We didn’t cave

In Vancouver people bought 23,800 properties last year. In Toronto, sales totalled 63,433. In the Lower Mainland, this was the worst year for deals in twenty years. In the GTA, realtors hadn’t seen numbers like this in exactly a quarter century.

The debate continues between those who think balking buyers are nuts and those who see them as prudent and wise. Affording a home in January of 2026 is vastly cheaper than it was a year or 18 months ago, after all. Prices are down – drastically in some areas and for some housing types – while financing costs have declined an average of 24%.

Is this not the market correction, complete with moaning sellers, that Canadians had yearned for? Why are sales crashing when affordability has soared?

On the other hand, some people are listening to guys like mortgage broker Ron Butler, now a podcasting and self-lubricating social media influencer who’s forecasting an Apocalypse. Buy nothing now, he says. Wait until May and June and see what happens. You might save some money.

Of course, the kiddos might run into reviving markets, as well. We haven’t had a decent spring real estate romp for three years. The average age of first-time buyers is approaching menopause. The economy has refused to roll over. Average incomes are rising faster than inflation. Interest rates are far lower than two years ago, and stable. Plus the world might look like a brighter place as a certain American president faces the judgement of voters later in 2026.

The point is: we don’t know. Nor do you. Or tubby TikToker Ron. So if you really need a house and can afford one without screwing up yourself or your family, then one thing is obvious: it’s easier now than it was.

The latest jobs numbers came out this morning. What do they tell us?

Canada added about eight thousand positions, which was meh. Those big job gains of the past few months dissipated, which was expected. (We are still doing far better, proportionately, than America. More evidence of that today.) The unemployment rate here went back to 6.8%, largely because eighty thousand more people were looking for work.

Most new jobs are full-time. Good. Wages are up 3.4% annually (beats inflation handily). And let’s not forget Canada added 81,000 new positions in the last three months, despite Trump, tariffs and Pierre Poilievre telling us Canada is broken. The economy is weak, but given the American attack, we’re still standing, baby. We didn’t cave.

“After a string of upside surprises, the Canadian labour market gave back some of its gains in December, with job growth effectively petering out, and the unemployment rate ticking higher as more people started looking for work,” says TD Economics. “In a noisy data series, this is not all that surprising and remains in line with our view that the labour market is not yet out of the woods.”

Adds BMO: “Canadian employment rose by a modest 8,200 in December following an incredible three-month run of strength (an average monthly job gain of 60,000), albeit yet again topping expectations.”

So what does this mean for the Bank of Canada? For mortgage rates? House prices?

Nothing. No change. No decrease, and maybe those expected hikes late in 2026 are also now history.

“The moderation in December is not soft enough to stir much interest for the Bank of Canada—but it also should quiet down some of the chatter over potential rate hikes later in 2026, supporting our view that the Bank will be on hold this year,” say the BeeMo guys.

“With more people once again looking for work, today’s unemployment rate suggests that there’s still plenty of room for non-inflationary growth before the Bank of Canada will need to think about interest rate hikes,” say CIBC economists. “We continue to see no change in the Bank’s overnight rate this year.”

TD agrees. ”This report is unlikely to move the needle for the Bank of Canada. There is still slack in the labour market, but uncertainty about the supply side of the economy and the risk to inflation means they are unlikely to tip the policy rate into accommodative territory.”

So home loans remain in the 4% range. Maybe all year. Real estate markets open 2026 in a weak, debilitated, unloved way. Asking prices have dipped a little. Sales prices have fallen further. The slow melt we’ve seen in place since the peak of 2022 has not accelerated, despite all the crap thrown at Canada in 2025. We avoided recession. Inflation fell. The population stabilized. The financial markets are rocking. We live in a country without masked, heavily-armed federal agents on the street, billions in personal medical debt or The Personal Lives of Mormon Wives. (Seriously, it’s a thing.)

So, you can wait until spring to shop for a house, like old Ron says. But also ask yourself why so many sellers are waiting until April to list. Something’s bound to happen.

About the picture: “We lost our little guy, Onyx, in 2025,” Peter writes. “He loved his boat rides! Thank you for sharing, contributing and helping build a better Canada. Wish you and yours a happy, healthy and prosperous 2026.”

To be in touch or send a picture of your beast, email to ‘garth@garth.ca’.

Source: https://www.greaterfool.ca/2026/01/09/we-didnt-cave/