Canada's Housing Market Hits a Wall, Says Rosenberg Research

08:58 AM EST, 12/16/2025 (MT Newswires) -- A few more rounds of Canadian data came in on Monday the form of November existing home sales and housing starts, which further highlight the soft demand and excess supply in this interest-rate-sensitive sector -- setting the stage for more shelter disinflation, said Rosenberg Research.

Existing home sales came in at 0.6% month-over-month weaker to 40,390 units after a 0.9% uptick in October -- although this was the second decline in the past three months. On a year-over-year basis, home sales tumbled by 7.6%, on top of a 4.1% decline in October, showing that the pace of Bank of Canada rate cuts hasn't been doing much to stimulate the moribund housing sector, noted Rosenberg Research.

Although new listings -- a key supply-side measure -- decelerated to a 1.0% year-over-year gain from a 3.8% rise in October, its trend is still outpacing demand by nearly nine percentage points, added Rosenberg. So it was no surprise to see that average sale prices nationwide dwindled for the first time since February, by 0.3% month over month to $688,600.

As the supply-demand mismatch continues to dampen home prices, Canadian housing starts leaped by 9.4% month over month to 254,000 units annualized in November and surpassed the expected 250,000 unit reading -- but is still down 5.0% year over year -- while it is 30% above the historical norm on a six-month moving average basis at 264,000 units.

It is abundantly clear that the incoming housing supply pipeline remains elevated, and with no signs of a revival in housing demand, this can only pave the way for rental disinflation in the consumer price index, which should make it easier for the BoC to recommence its rate-cutting cycle if the economy struggles in early 2026, according to Rosenberg.

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