Two regions of Ontario that led sales in the red-hot housing markets in the country over the last few years have done a complete reversal and now lead the country in contributing to a 5.8% drop in January from December and down 16.2% from January 2024.
And it’s due to the weather, says Shaun Cathcart, senior economist with the Canadian Real Estate Board (CREA).
“The monthly decline in national home sales was driven primarily by less activity in the Greater Golden Horseshoe and Southwestern Ontario, suggesting that the story was probably more about a historic winter storm than a downshift in demand,” said Cathcart in CREA’s monthly market update.
“Notwithstanding the chilly start to the year, we continue to expect 2026 will ultimately be defined by pent-up demand from first-time buyers finally seeing a chance to enter the market.”
New supply across the country increased 7.3% on a month-over-month basis in January, as sellers seemed eager to get the year started.
“The burst of new supply was driven by about two-thirds of local markets, and led by Montreal, Quebec City, Calgary, Greater Vancouver and Victoria,” said Cathcart.
“Meanwhile, Central and Southwestern Ontario were far less prominent. In many cases, recording declines, reinforcing the view that winter weather was a primary factor in January in those regions, as it appears to have suppressed both demand and supply.”
The Home Price Index dropped 0.9% in January from December and was down 4.9% on a year-over-year basis. The national average sales price was down 2.6% on a year-over-year basis in January.
“We always say all real estate is local, and on occasion, including this January, that can mean the impact of local weather on the market,” said Valérie Paquin, CREA chair. “In a repeat of 2025, new listings are showing up early to start the year, so sellers are eager to get going, but we may have to wait a bit longer to see how buyers react.”
“There were 140,680 properties listed for sale on all MLS systems in Canada at the end of January, up 4.5% from last year but 11.4% below the long-term average for that time of year,” said Cathcart. “There were 4.9 months of inventory on a national basis at the end of January 2026, up from 4.6 months at the end of December.”
Economist Robert Hogue of RBC Economics said the weather may have put a chill on sales, pointing to a major snowstorm hitting Ontario and frigid temperatures in other parts of the country.
“But, signs of buyer hesitation have been visible since fall when an emerging recovery stalled in the face of persistent affordability challenges, economic uncertainty and slack in the job market,” said Hogue. “Perhaps, more noteworthy is the fact sellers didn’t seem bothered by weather disruptions. More put homes for sale, boosting new listings from December across Canada.”
Ontario and BC accounted for most of the price declines in the country and saw the trend accelerate in January, said Hogue.
“Toronto, down 8.1% and Vancouver, down 5.7% experienced significant depreciation in the past year though smaller markets like Hamilton, 9.8%, Kitchener-Waterloo, 9.2%, London, 8.4%, Niagara region, 8.3% and Fraser Valley, 7.1% recorded larger declines.” he said.
“Downward prices are also present in Alberta, where the MLS HPI fell 3.2% and 0.5% from a year ago in Calgary and Edmonton, respectively. A wave of supply has played a big role in the provincial market story since the start of 2025.”
On the other side were markets with increases, said Hogue.
“Home prices continued to rise in Regina, up 5.5% from a year ago, Saskatoon, 4.3%, Winnipeg, 5.6%, Montreal 5.7%, Quebec City 14.8%, Moncton 11.8%, Fredericton 3.1% and St. John’s 9.3%,” he said.
Looking down the road, Hogue expects a turn around.
“We expect the housing market recovery to get back on track once weather disruptions subside, and as confidence rebuilds,” he said. “Past interest rate cuts, brightening job prospects and improving affordability will help unlock some pent-up demand that has accumulated in recent years.”
“Still, this is poised to be a gradual process with diverging regional trends persisting through most of 2026.”
