BMO Capital Markets is warning that Canadian home prices haven’t moved in nearly a decade, once adjusted for inflation, and are now in the midst of the largest correction since the 90s. Unfortunately, years of prices leaping far beyond increases in household income have set Canada up for a painful payback period, now in year 4, with no bottom yet in sight. See, Canadian Real Estate’s Biggest Crash Since The ’90s To Worsen: BMO:
The price of a typical home across Canada is falling almost as fast as it climbed. Seasonally adjusted values jumped 56.7% (+$299,600) between the start of the low-rate frenzy in April 2020 and the peak of $827,600 in February 2022. After the first rate hike of this cycle, prices have plunged 20.1% (-$166,500) to $661,100 in February 2026, wiping out gains since early 2021. The correction has rolled prices back to where they were five years ago.
That’s without factoring in the damage inflicted by inflation, the bank reminds us. “In inflation-adjusted terms, that decline is nearly 30%. And, in those terms, Canadian homeowners have now seen 9 years of no real price appreciation,” explains Kavcic.
While a decade of stagnation sounds like a long time, it isn’t in the context of a Canadian housing correction. For context, it took roughly 22 years for Greater Toronto real estate prices to reclaim their inflation-adjusted value after the 1990s bubble collapse.
