Canadian Real Estate Prices Fall To Lowest Level In 4 Years: May home sales down 4.3 per cent from year ago, but activity up month-over-month… Is this the start of a severe Economic Downtown?

May home sales down 4.3 per cent from year ago, but activity up month-over-month

Yes, Canadian real estate prices have reportedly fallen to their lowest level in four years. 

Canadian Real Estate Prices Fall To Lowest Level In 4 Years

Canadian real estate’s ice cold summer continued last month. Canadian Real Estate Association (CREA) data shows the price of a typical home (composite benchmark) fell for a sixth consecutive month in May. Weak sales, rising inventory, and economic jitters helped to push prices to the lowest level in 4 years.

Canadian real estate prices continued to slide lower. The seasonally adjusted benchmark home fell 0.2% (-$1,500) to $690,900 in May. A typical home across the country is now the cheapest since May 2021—exactly 4 years ago.

Those looking for prices to firm anytime soon aren’t going to see that in the 12-month trend. The benchmark is 3.2% (-$23,100) lower than last year, with 12-month losses getting larger for four consecutive months.

Canadian Real Estate Prices Fall To A 4-Year Low

The seasonally adjusted price of a benchmark (typical) home across Canada.

Source: CREA

• Benchmark prices are back to 2021 levels: According to CREA, the benchmark price of a home in Canada in April 2025 was $689,200, similar to where it was in May 2021.
• Significant drop from peak: This represents a considerable decrease (18%) from the market peak in February 2022.
• Downward trend: Prices have been consistently declining in recent months, accompanied by rising inventory.
• Specific market examples: For instance, the single-family benchmark price in Hamilton-Burlington reached its lowest point since March 2021 in March 2025. 

• Rising interest rates: Higher interest rates have made mortgages more expensive, reducing affordability and dampening buyer demand.
• Economic uncertainty: Factors like trade tensions and rising unemployment can erode buyer confidence and contribute to a stalled market.
• Increased supply: As properties stay on the market longer and new listings come in, the supply of available homes increases, giving buyers more options and putting downward pressure on prices.
• Mortgage renewals: Many homeowners facing mortgage renewals may need to sell, further increasing inventory. 

• Market variations: While the national trend shows a decline, local markets may exhibit different behaviors. Some areas might still see rising prices, while others experience more significant drops.
• Affordability remains a challenge: Even with falling prices, strained affordability due to high ownership costs continues to be a hurdle for many buyers.
• Policy impacts: Government policies related to immigration and mortgage rules could influence the future trajectory of the market.
• Uncertainty persists: The future of the Canadian real estate market remains uncertain, with potential for further price adjustments depending on economic conditions and trade developments. 

Canadian Real Estate Prices Now At The Furthest Point Since Peak

According to the board’s benchmark data, home prices have steadily fallen from the record high. The market top was back in February 2022, and since then, the benchmark has fallen 17.5% (-$146,500) as of last month. May marks the largest decline from the all-time high.

The declines are hardly a surprise, and largely just confirmed what experts had anticipated after major markets reported weak demand and rising inventory. With a flood of inventory still set to arrive, a lack of affordability, and a trade war with no end in sight—it’s hard to see how this trend lets up anytime soon.