January 14, 2026 | Frozen Real Estate Markets Weigh on Sellers and Investors

The Greater Toronto Area’s (GTA’s) 62,400 residential real estate transactions during 2025 were the lowest since 2000 and 51% less than in 2021. In the Greater Vancouver Area (GVA), the 23,800 residential transactions were the fewest since at least 2005. See, Home Sales in Canada drop to historic lows in 2025.

Sales fathomed multi-decade lows, even as fixed mortgage rates fell from above 6% in 2024 to around 4% in 2025 and the average sale price dropped roughly 18% nationally and -25% from the early-2022 peak in the Greater Toronto Area.

About 60% of outstanding mortgages (1.15 million mortgages according to CMHC) are set to renew by the end of 2026, and many of those taken out in 2021-22 are facing a significant interest rate increase. Some borrowers in variable-rate mortgages experienced negative amortization during the rate spike—meaning they now owe more than when they took out the initial loan.

February 2026 marks the fourth year since the top of Canada’s real estate bubble, and those expecting an imminent rebound have been continually disappointed. The volume of homes listed for sale this spring looks poised to balloon as disgruntled would-be-sellers look to relist.

Similar trends are unfolding in America, where Redfin housing-market analysis shows that in November 2025, there were about 37.2 % more home sellers than buyers in the U.S. housing market — roughly 529,770 more sellers than buyers. That gap represented one of the largest imbalances in records going back to 2013.

At the same time, those who poured savings into real estate investment funds over the last few years are increasingly finding their capital frozen. Some 40% of Canadian real estate investment funds are now denying withdrawals. See, Canadians Are Furious After Real Estate Funds Lock Up Their Money:

Across Canada, investors who poured billions into private real estate funds suddenly can’t touch their money. Stung by a deep downturn in the country’s housing market, many of the funds have restricted cash distributions, client withdrawals or both, in a process the industry calls “gating.” Often, the companies don’t say when access will resume. About C$30 billion ($21.7 billion) — almost 40% of the C$80 billion invested in such funds — is now locked up.

For markets to clear, properties need to find able and willing buyers. That’s going to take time and lower prices. This type of cash crunch tends to be contagious.

Danielle Park January 14th, 2026

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