Global data show Canada leading advanced economies in housing losses
Canada’s housing correction, already among the harshest in the developed world, looked even starker in new global data from the Bank for International Settlements (BIS).
In its latest residential property price release, BIS reported that inflation‑adjusted house prices in Canada fell 5% year over year in the third quarter of 2025, the steepest drop among major advanced economies. China matched that 5% slide, while Finland saw a 4% decline.
The BIS noted that real prices across advanced economies were broadly “stable,” and that “a few major economies” drove the global drop even as “most AEs and emerging market economies recorded price growth.”
Karl Schamotta, chief market analyst at Corpay Currency Research, said the figures show how far Canada has fallen since the pandemic boom.
“Canada is still in the grip of one of the deepest housing downturns in the advanced world,” he said. “After spectacularly outsized gains before and after the pandemic, home prices have fallen more sharply than in peer economies and are showing little sign of stabilizing.”
From the first quarter of 2022 – the peak of Canada’s pandemic housing frenzy – to the third quarter of 2025, nominal prices fell about 18%, outpacing a 17.8% drop in China and far exceeding declines of 6.8% in South Korea and roughly 6% in Germany and Sweden.
Over the same period, prices in the United States and United Kingdom rose 12.3% and 8.9% respectively.
The turning point for Canada came in early 2022, when the Bank of Canada began lifting its policy rate from 0.25% to 5%.
The Canadian Real Estate Association said 2025 quietly ended with sales down nearly 2% for the year and the composite benchmark price down 4% in December from a year earlier.
TD Economics projects only a “gradual, modest recovery” this year, with pent‑up demand set against weaker economic momentum, job softness and a Bank of Canada that is expected to “stay on the sidelines this year.”
Meanwhile, in a February report, CIBC’s Benjamin Tal and Katherine Judge argued that prices were “still too high to buy and not high enough to build,” warning that condo markets outside Toronto and Vancouver were starting to show stress while housing starts masked a deeper slowdown in new projects.
A January feature highlighted buyers who believed “prices still have some way to fall,” even as some brokers saw current discounts and lower rates as an “ideal entry point” in Toronto.
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