Real estate association blamed winter storms – but expert says other factors are also pummeling the market
New January housing figures suggested Canada’s market has cooled again, but not for the reasons many in the industry first assumed. While a historic winter storm battered Ontario and disrupted activity, a prominent economist believes softer demand has increasingly been about people, not weather.
The Canadian Real Estate Association (CREA) reported that national home sales fell 5.8% month over month in January, with actual transactions down 16.2% from a year earlier. The drop was concentrated in the Greater Golden Horseshoe and Southwestern Ontario, regions hit by a late‑January blizzard that shut schools, grounded hundreds of flights and triggered Toronto’s major snow response plan.
Canada’s housing market opened 2026 on the back foot, as national home sales dropped sharply in January and new listings climbed, widening the gap between buyers and sellers just as a historic winter storm swept southern Ontario.https://t.co/Slp0YsCXwl
— Canadian Mortgage Professional Magazine (@CMPmagazine) February 18, 2026
But David-Alexandre Brassard, chief economist at CPA Canada, isn't so sure bad weather was mainly responsible for that sluggish activity. “We have almost never seen a Canadian housing market that wasn’t supported by strong population growth, so it’s not surprising to see sales and prices soften without that growth,” he said in a note on Wednesday.
“We could be tempted to blame rougher conditions on bad weather, as was done with the recent dip in labour market data, but new listings were higher in January than in recent months and matched last year’s levels. Weak sales are pushing inventory up to where it was in spring 2025, when tariff uncertainty was at its peak,” he said.
CREA’s senior economist Shaun Cathcart offered a different emphasis, arguing that “the story was probably more about a historic winter storm than a downshift in demand” after activity in central and southwestern Ontario fell sharply along the storm’s path.
Brassard focused instead on a structural drag that mortgage professionals have been tracking for months. “While interest rates have eased slightly, slower population growth is now weighing more heavily on demand,” he said. “Demographics will play a much bigger role in shaping sales and prices going forward, especially with a policy rate expected to remain steady for some time.”
Canada’s population slide and tighter immigration targets have already raised questions about long‑term housing and mortgage demand, particularly in Ontario and British Columbia. Those trends have intersected with weaker pre‑sale and condo activity, even as purpose‑built rental construction picked up in parts of the country.
TD Economics highlighted how an immigration slowdown “cools Canada’s rental market” even as affordability remained strained. An RBC analysis, meanwhile, said new immigration rules were likely “to cool housing demand,” with fewer temporary residents expected to soften demand for rentals and entry-level homes, even as some were fast-tracked to permanent status.
Bank of Montreal (BMO) senior economist Sal Guatieri said during a conference this year that lower immigration “will be a bit of a dampener on consumer spending and, of course, the housing markets and rental markets for a little while.”
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