Canadian Real Estate Correction Delayed In Other Provinces?

Despite all the talk of a Canadian housing market “crash,” the data tells a very different story depending on where you look. According to the Canadian Real Estate Association (CREA), the national benchmark home price fell to $686,800 in August 2025, down 19.4% (-$164,800) from the peak. But this steep drop is almost entirely due to what’s happening in Ontario and British Columbia. The rest of the country? Still hovering near record highs.

Record Highs Across Most Provinces

Looking beyond Canada’s two most expensive provinces reveals surprising resilience.

• Newfoundland, a small market with fewer sales than Saskatoon, just set a fresh record high in August.

• In total, 8 out of 10 provinces hit all-time highs within the past year, and 6 of those reached records in just the past quarter.

• Provinces like Saskatchewan, Manitoba, Alberta, and the Atlantic region have only seen tiny declines, ranging from -0.13% to -1.97% from their peaks.

This hardly looks like a widespread crash—if anything, it shows that most provinces have only slowed in sales activity, not prices.

Ontario’s Steep Correction

Ontario has experienced the sharpest reversal in the country.

• From March 2020, when interest rates were slashed, to February 2022, Ontario home prices soared 59.9% (+$396,500).

• Since then, prices have dropped 25.6% (-$271,200).

• Even after that correction, prices remain 18.9% (+$125,300) above pre-rate cut levels—meaning affordability is still stretched.

Ontario’s market shows just how sensitive expensive real estate can be to changes in interest rates.

BC’s Market: Stickier, But Still Correcting

Here in British Columbia, the correction has been more modest.

• Prices jumped 51.6% (+$364,600) between March 2020 and April 2022.

• Since the peak, they’ve slipped 12.0% (-$128,800), bringing the benchmark to $942,800 in August 2025.

That’s about half the correction Ontario has seen, which highlights how “sticky” BC’s market continues to be—even with higher rates weighing on buyers.

The Real Driver: Cheap Credit, Not Population Growth

So, what’s really behind the changes? It’s not just immigration or slowing population growth.

The true driver has been cheap credit. Lower interest rates during the pandemic fuelled massive borrowing, especially in expensive markets like Ontario and BC. Immigration and interprovincial migration helped add pressure, but ultimately, interest rates determined just how far buyers could stretch themselves.

This is why Ontario and BC corrected so sharply when borrowing costs climbed—while the rest of the country, with lower price points, continues to hold steady.

Bubble Contagion and Interprovincial Migration

Another trend worth noting is “bubble contagion.” Buyers leaving frothy markets like Toronto and Vancouver often look to other provinces, rationalizing higher prices elsewhere.

For example, the condo discount in Halifax versus Toronto shrank from 50% in 2020 to less than 20% in August 2025. That gap illustrates how demand and pricing pressures spill over across provinces, even when local fundamentals might not fully support it.

What It Means For Buyers and Sellers

Ontario and BC are correcting, while other provinces continue to hit new highs. The big question: are those markets immune, or just late to the downturn?

For buyers and sellers in BC, the takeaway is clear—our market remains resilient, but it’s not immune to rate pressures. Understanding these dynamics is key to making smart real estate decisions in today’s climate.

Let’s Chat About Your Next Move

Whether you’re considering upsizing, downsizing, or making your first move, let’s chat about your options and how today’s economic trends may affect your buying or selling strategy.

✨ Tara Kennedy
🏡 REALTOR®, ABR, RENE, SRS
📞 236-992-8989
🌐 TaraKennedy.ca
📧 TaraKennedySells@gmail.com

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