Why are Canadian housing prices down?

Housing - real estate - has always been considered the best investment you can make here in Canada. Not so much any more. Compared to the top of the market, back in the heady days of 2022, the average value of a home is down about 21%. A pretty substantial hit. The stock market, on the other hand, is still going great guns, despite all the global turmoil that would suggest otherwise.

So, what happened to house prices? Let me count the ways.

Mortgage rates have come down some after the precipitous increase following the pandemic, but they are still well above the 20 year average.

The country's population is actually falling for the first time since Confederation, after a huge increase in immigration in recent years, and housing responds very quickly to falling demand.

Housing remains unaffordable for many. The gross debt service ratio for housing remains stubbornly high.

New housing starts may have flatlined or even fallen recently, but there is still an oversupply of housing if anything (despite what the politicians are saying), at least in some markets, which is depressing prices.

General buyer sentiment is likewise depressed, as a sluggish economy and a poor job market (largely as a result of AI developments and US trade policy) weigh on people's minds. The uncertain CUSMA trade deal renegotiation later this year, and the current oil price shock, also has people waiting out commitments to large expenditures.