The red-hot housing roller coaster has been to the highest point of its track and is now rolling back down to ground level in Canada.
In Toronto, once the hottest market in Canada, a home listed last fall, had its sales price reduced by $1.5 million, down to $7.3 million. The price drop on the home, with six bedrooms and five bathrooms, is indicative of a housing market that has spiraled down from the red-hot housing boom that took hold in 2021.
While price cuts of that magnitude aren’t indicative of other Canadian markets, other than perhaps the Greater Vancouver Area, price cutting is indicative of markets across the country, as sales slow and supply increases.
A look at the Calgary market, as of Tuesday, shows single-family home sales, year-to-date, were 747 units compared to 791 in the same time frame of 2025 and 908 sales in 2024.
The median sales price was $698,000, down from $740,000 in 2025 and $717,750 in 2024.
Active listings were 2,175 compared to 2,163 in 2025 and 1,144 in 2024.
All housing types in Calgary, townhome, semi-detached and apartment, showed similar drops in sales and prices.
During the COVID-19 pandemic, Canadians took advantage of cheap loans, savings accounts full and a chance to move-up to larger homes or just get out of renting and becoming owners.
It set off a housing boom like no other, with bidding wars for homes, primarily in Toronto and Vancouver.
It also shot inflation up, forcing the Bank of Canada to increase its overnight rate to as high as 5% to cool housing markets.
Investors who were very active have pulled back, especially in the condo market and particularly in Toronto says Canadian Mortgage Professional (CMP), adding the absence of investors means quieter, more stable housing markets going forward.
There was also a time when fear of missing out (FOMO) on a chance to buy a home made more buyers act, but FOMO is no longer a factor, says Joe Sammut a broker-owner at Mortgage Architects.
“The consumer confidence to go out there and buy because they want to buy, that’s gone. Those days of FOMO are over,” says Sammut. “Now you’re buying because you have to have somewhere to live. We’re going back to the markets from 25 to 30 years ago when you bought because you needed an extra room, because you had an extra child or you sold because your kids moved out and you downsized.”
First-time buyers who gave up the idea of home buying because of high prices and competition from investors may now come back into the market.
“I don’t believe the speculation market is there. It’s just not affordable anymore,” Sammut said. “You can’t get a good cap rate on an investment property to speculate.”
More homebuyers are doing their research before taking the plunge plus, says Sammut, “those who are in a position to buy are more qualified than ever, because they’ve been planning to purchase for a long time and have done their research on what they need to do to make the right move.”
At issue is that their numbers are small.
“They’re a better-quality buyer today,” Sammut said, “but they’re few and far between. In the market going forward, I think we’re in for at least another two years of this.”
He doesn’t expect those two years will see markets nosedive, with some regions projected to fare better than others depending on local economies.
“I think we’re going to go back to a normalized ‘I’m buying because I have to buy, not just because I want to buy’ market,” said Sammut. “I think interest rates this year will be stable or slightly higher. I don’t think they’re going down.”
“And I think it really comes down to hitting the bank at the right time. So, I think the consumer is going to be a lot more in the know going forward than they have been.”