The confidence game

Four months ago it was a detached, three-story, $4-million urban home for sale on the fringe of uppity Yorkville in DT Toronto. Now it’s $3.2-million property. Still for sale. Odds are that 20% haircut won’t be the last one – in a hood where properties, even the lux, normally find buyers in just weeks, if not days.

Meanwhile, remember that historic, unprecedented surge in listings in Canada’s biggest market? Poof. She’s gone. In June buyers had 31,600 choices in this one region. Last month that had shrunk like a polar bear’s wizzle. Just 17,000.

Yes, listings always trail off as the year ends, but in 2025 sellers were uniquely shunned, ignored and shamed into submission. Many relisted multiple times, vying for attention. Scads just gave up. Others submitted to ravishing by low-ballers.

So the pattern in the GTA matches that described here yesterday for the Lower Mainland and Alberta. Sales were down 11% for the year, about 9% last month. Average prices lost 6% over the year, a trend that continued into December.

The average 416 detached selling price in the spring of 2022 was $1.948 million, Last month that same house was worth $1.498 million. That’s a drop of 23%. For those born too soon to remember it, the most severe correction in memory in this market came at the end of the 1980s and into the recession of the Nineties. That carved 32% off the average price, and took about the same length of time to occur.

If history were to repeat, then that average detached 416 property would tank at $1.325 million. The decline from the 2022 peak = $623,000.

Will that happen? Is a bottom at hand? Or is there no floor?

Guess what the realtors think…

“The housing market became more affordable in 2025 as selling prices and mortgage rates trended lower,” says the real estate board Head Poohbah. “Improved affordability has set the market up for recovery. Once households are convinced that the economy and labour market are on a solid footing, sales will increase as pent-up demand is satisfied.”

For the record, here’s where this market now stands. These are the official MLS stats.

But wait. What’s the case for optimism? Since December (which was seven days ago), the Americans invaded Venezuela, kidnapped the president and declared that the US president is now “running” the country. The White House appears on the brink of grabbing or ‘buying’ Greenland, and may also invade Columbia. And Panama. Maybe take over Cuba, too. Of course, Canada is still on the table. Our oil exports tumbled in value as the Yanks mull reviving the Venezuelan reserves they just captured. The Canada-US trade deal which has protected our economy is up for renegotiation with the rogue president. And did I mention NATO may be in serious jeopardy. That, too.

Says the chief economist for the Ontario property cartel: “Reaffirmed trade relationships and large-scale domestic economic development projects will be key for improved home sales moving forward. GTA households must be confident in their employment situation before committing to long-term monthly mortgage payments, even in this more affordable market.”

Exactly. Without confidence, there are few pre-sold condos or accepted offers in the resale or assignment markets. So the construction business is in the ditch and 70,000 local realtors are staring at hard days ahead.

Can this ship turn around, like a US-seized Russian-flagged South American rusty oil tanker?

Of course. People have an insatiable need and desire for houses. Canada is a real estate culture. We have an inbred fetish. And rampant financial illiteracy has driven the masses back to ‘investing’ in their homes after every single economic or financial crisis. It will happen again. Yes, prices have further to fall. No, they won’t collapse. And the road back to 2022 valuations could take until 2033, if the pattern of the last boom-bust-boom cycle is repeated.

Trumpism and MAGA cannot last. Canada will not be annexed. The current gang in Ottawa is actively plotting a path out of American domination. Our nation is a stable, secure, prosperous, healthy democracy, less polarized and far less radical than the US. And while we have stupid house prices, Drake, Kevin O’Leary, Rebel News, wind chill and embarrassing PWHL team names, plus separatists in a few yokel puddles, we still rock.

If you want a cheaper house, wait. A bit.

About the picture: “Here are some pics of my good boy, Louie, who likes to join me skiing in Strathcona Park on Vancouver Island,” writes Jeremy. “Feel free to use any of them on your blog if you like!”

To be in touch or send a picture of your beast, email to ‘garyh@garth.ca’.

Source: https://www.greaterfool.ca/2026/01/07/the-confidence-game/