Home prices in several of Canada’s largest urban markets remain well below their pandemic-era peaks, extending a multi-year correction that has reshaped conditions for buyers and sellers. While prices have eased from record highs reached in 2021 and early 2022, economists and industry analysts say a return to widespread bidding wars is still some distance away.

Average resale prices in the Greater Toronto Area are more than 20 per cent lower than in 2022, while prices in Greater Vancouver remain about 11 per cent below their peak, according to the Canadian Real Estate Association. Other major centres have recorded comparable declines, though price movements have been more stable in parts of the Prairies and Atlantic Canada.

The downturn has coincided with a sharp increase in forced sales in Ontario, particularly in the Toronto region, as higher borrowing costs strain highly leveraged households. Analysts describe the market as being at an impasse, with prices still out of reach for many first-time buyers and sellers reluctant to accept levels far below recent highs, contributing to softer sales and rising inventory.

The correction follows an unprecedented pandemic-era surge fuelled by ultra-low interest rates, strong population growth and speculative demand. Although the Bank of Canada has begun cutting rates after an aggressive tightening cycle, affordability remains stretched, and analysts expect a prolonged period of stabilization rather than a rapid rebound. Inflation-adjusted comparisons and past housing cycles suggest that regaining 2022 purchasing-power highs could take many years.