Canada's housing market has experienced one of its sharpest corrections in history, with benchmark prices falling approximately 20 percent nationally since 2022 and over 30 percent in some cities. Yet, many Canadians believe this decline is insufficient to restore affordability.
Majority Wants Further Price Declines
According to a Nanos Research Group poll conducted for Bloomberg News, about 55 percent of Canadians desire additional decreases in home prices. Among those aged 18 to 34, that figure rises to 69 percent. Even among homeowners, two-thirds viewed the price drop as a positive or somewhat positive development for the housing market, mirroring the overall sentiment among Canadians.
Context of the Correction
The pullback follows a record surge in home prices after the COVID-19 pandemic, fueled by slower population growth and increased supply in some communities. Robert Hogue, assistant chief economist at Royal Bank of Canada, noted: "If you just look at the numbers, you would very quickly conclude this is a massive crash in home prices. But the thing is, it's after prices had increased even more. We're just reversing what some would argue — and I would argue — were excessive price increases."
The market has only returned to pre-pandemic levels, when housing affordability was already widely recognized as a national crisis. Mike Moffatt, who leads the University of Ottawa's Missing Middle Initiative, remarked: "I think it just shows how far out of whack prices are with incomes that prices can go down 15 percent to 20 percent and it's still priced out middle-class families."
Uneven Affordability Improvements
Affordability gains have been lopsided across Canada. According to RBC, only half of markets continued to see easing in the second half of 2025. The steepest price declines occurred in British Columbia and Ontario, regions that experienced the largest post-pandemic increases. However, homes in major metropolitan centers remain exorbitantly expensive: the share of household income needed to cover housing costs is 88 percent in Vancouver and 63 percent in Toronto.
First-time buyers are more hesitant to enter the market than they were a few years ago, according to Toronto real estate agent Alexis D'Souza. The persistent affordability crisis suggests that while the correction is significant, it has not yet resolved the structural imbalance between prices and incomes.
