Is the Worst Over? Canada’s Year-End 2025 Housing Market Reality Check

The Canadian housing market is entering 2026 with mixed signals. National data suggests slow stabilization — while Toronto’s condo sector continues to face significant structural pressure. Rising months of inventory, delayed completions, and valuation gaps are reshaping both investor sentiment and consumer confidence.

Ciao! Welcome to a new episode of Helping YOU Build Build Wealth Through Real Estate...Brick by Brick with me, Nico James-Bock, Founder of The CondoWiz™ Group and Broker at Keller Williams Co-Elevation Realty in Toronto.  

In this episode, I break down:
 • Why modest sales gains don’t yet signal a recovery
 • How higher qualification stress and soft condo valuations are impacting closings
 • Why affordability across Ontario has reached a historic low
 • The real odds of a December rate cut — and what it means for 2026
 • When experts expect the next true turning point

This is the moment to cut through headline noise and understand the underlying trends shaping the year ahead.
 Forward-looking strategy > reactive decision-making.

Ciao ciao

Transcript

Is the Worst Over? Canada’s Year-End 2025 Housing Market Reality Check

Canada’s housing headlines are getting louder again — sales nudging up, listings edging down, and analysts whispering about a potential “inflection point.”
But let’s keep it real: this isn’t a breakout. It’s stabilization.
A slow tightening, not a surge.

Ciao! Welcome to a new episode of Helping YOU Build Build Wealth Through Real Estate...Brick by Brick with me, Nico James-Bock, Founder of The CondoWiz™ Group and Broker at Keller Williams Co-Elevation Realty in Toronto.  

Prices are basically flat, and buyers are cautiously re-entering the pool — more toes in the water than cannonballs.
The smart money sees this as groundwork for recovery, not the recovery itself.

The Big Forces: What’s Really Driving the Next 12–18 Months

The next phase of the market won’t be decided by a single CREA report — it’s going to be driven by the economy at large.
Slower job growth, global trade uncertainty, and cooling population growth are still the dominant pressures.
Policy changes on housing supply and taxation will help over time, but they’re slow burns.
If you want the real signal? Watch labour numbers, immigration flows, and rate cuts — not the month-to-month noise.

Rates Watch: A 25 bps Cut? Don’t Hold Your Breath.

For the upcoming December 10 Bank of Canada meeting, expectations for a rate cut are hanging by a thread — roughly a 13% chance.
Inflation is cooling (2.2% year-over-year), but not enough for the central bank to move boldly.
Translation: borrowing costs stay elevated, pressure stays high, and the “relief rally” many are hoping for likely waits until spring.

Condo Market Crisis: How Bad Does This Get?

Toronto’s condo sector is still in a painful correction.
Values have been easing for two straight years, and many buyers can’t qualify for mortgages on their original pre-construction prices.
Investors are bleeding — especially on ultra-small “dog crate” units nobody wants to live in, rent, or buy.
Some buyers are walking away entirely, forfeiting deposits and facing legal repercussions.
Most outlooks now point to 2026 for the start of a rebound… and 2028 for a fully healthy market.

Beyond Toronto: A Province-Wide Affordability Squeeze

It’s not just the big city.
New analysis shows mortgage payments now swallow more than 50% of after-tax median family income in all of Ontario’s 14 largest urban centres.
This tells us something blunt: the affordability crisis isn’t local — it’s structural.
And rate cuts alone won’t fix it.

Teaser: A Tower That Defines the Moment

And speaking of structural…
There’s one project that captures the entire mood of this market — ambitious, troubled, and at a crossroads.
Court filings this week confirmed hundreds of buyers will have their agreements cancelled at the long-delayed tower at One Bloor West.
It’s a story of deposits, delays, receivership, and what happens when market optimism outruns market fundamentals.
I’ll be dedicating a full episode to what this means — for buyers, for developers, and for the future of pre-construction in the GTA.

As we wrap up this year-end reality check, one thing is crystal clear: Canada’s housing market isn’t collapsing, and it isn’t roaring back — it’s recalibrating. The pain points are real, especially in the condo sector, and affordability across Ontario remains stretched to historic extremes. But beneath the volatility, the foundation for the next cycle is quietly forming.

Buyers are adjusting, sellers are recalibrating, and the system is working its way toward balance… even if it’s slower and messier than anyone hoped.

The real catalyst — the moment that could tilt sentiment for early 2026 — arrives on December 10th, when the Bank of Canada delivers its final interest rate decision of the year. Whether they hold the line or hint at cuts, that announcement will set the tone for the first quarter and determine how quickly confidence returns to the market.

So stay tuned, stay sharp, and stay ready — because the next chapter of this market is just around the corner.

And as always, I'm here Helping YOU build wealth through real estate… Brick by Brick.

Ciao ciao 👋🏼

TheCondoWiz@gmail.com

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