TD Sees Limited Scope for Canada's Home Prices to Rise Meaningfully in Near Term

10:26 AM EST, 01/15/2026 (MT Newswires) -- Canadian existing home sales declined 2.7% month over month in December, marking the second straight monthly drop and the largest decline since March, said TD after the Canadian Real Estate Associaton released data on Thursday.

New listings decreased 2% month over month in December, a fourth straight monthly drop. The sales-to-new listings ratio fell to 52.3% -- below the long-term average -- as sales decreased by a greater amount.

This points to sub-trend Canadian average home price growth in the near-term, noted the bank.

Average home prices were flat on a month-over-month basis in December. Ontario and Quebec registered sub-1% month-over-month gains. Meanwhile, prices dropped in British Columbia 1.6% month over month.

The MLS home price index, a more "like for like" measure, declined 0.3% month over month and is down 4% on a year-on-year basis. Prices for detached units were down 0.2% m/m, while condo prices fell 0.4% m/m. Notably, a much weaker performance in the home price index than the average home price measure suggests the presence of compositional forces on prices -- in other words, more expensive housing sold relatively well last month, lifting average prices.

Canadian home sales ended last year on a listless note, pointed out TD. Sales have stabilized at low levels over the past few months amid strained affordability, a sluggish economy, and buyer uneasiness.

The bank thinks sales levels will remain low this year as well, impacted by economic uncertainty.

With their weak December showing, Canadian average home prices mirrored sales, and TD believes that there's limited scope for them to push meaningfully higher over the near-term, given the supply/demand conditions that favour buyers in B.C. and Ontario.

However, price growth is much stronger elsewhere, with near-double-digit annual average price gains posted in markets like Saskatchewan, Quebec, and Newfoundland and Labrador in 2025.

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