We’ve had challenging real estate markets in Canada before, but at the end of the day, homes are amazing investments – and we get to live in them. For many Canadians, homeownership is the best and most profitable financial and lifestyle decision they ever make. Housing – especially the new homes sector – is a cyclical industry. Over the decades, we have had our ups and downs, but those who ride out the cycles typically do well when it comes to building equity and benefitting from price increases over time. In a tough market like today’s, prices fall and savvy people buy.

Historical perspective

Look at things historically. New homes rose in value after the economic crisis in 2008. Some prices doubled or tripled because of low interest rates, population growth and shortages of supply. By 2024, the national average price of new homes had risen from $306,500 to more than $700,000. In some markets across Canada, benchmark prices increased between 100 and 200 per cent during the past 20 years.

During the 2019 to 2021 pandemic years, predictions were that falling prices would not recover to their pre-pandemic levels until at least 2023. By the end of 2021, however, Canadian Real Estate Association’s (CREA) house price index had risen by 26.6 per cent, the fastest annual pace on record. Condos accounted for most of the new housing in Ontario. This period also brought with it the tremendous appeal of “zoom towns” with remote workers, and housing prices soared. Living outside Metro Toronto became more economically feasible for those who worked in the city. Smaller towns offered affordability and a slower-paced lifestyle.

In early 2022, prices peaked, having doubled since 2011, and the Bank of Canada started raising interest rates. By September of that year, average and median prices for detached houses declined by nearly $400,000 in the GTA. Since then, housing price decreases and declining interest rates have had some effects on housing affordability. What we need now is renewed consumer confidence in real estate.

Appreciation over time

Cycles have shown that new homes follow resale in cycles. CREA tracks areas in Canada, and according to that organization, from 2015 to 2025, 35 of the 51 tracked areas saw resale real estate prices rise by 100 more or more. The lowest increase over the 51 areas was 5.2 per cent. In other words, generally, real estate appreciates over time.

That is why despite all the negative coverage in the media, we are actually experiencing a “buyers’ market.” During Q4 2025 and the beginning of Q1 2026, the GTA housing market showed increasing inventory levels, especially for condos. At the end of October, the combined inventory level in the GTA sat at around 22 months, as very little inventory had been added during 2025. This was the highest inventory level seen to that date. Savvy real estate professionals are encouraging potential condominium purchasers to buy NOW. With inventory the way it is, they will find outstanding prices and more negotiating power than ever before.

Today’s interest rates are incredibly low compared to what we experienced in the 1980s and 1990s. And remember that back then, those who found strategies to cope with cyclical lows came out ahead in the long run.

Homeownership provides tax benefits and is an important part of a diversified financial portfolio. Compared to stocks and bonds, real estate is far less volatile of an investment. For one thing, it is a tangible asset, which offers a certain level of peace of mind. Owners can keep an in-person check on their investment and can change or upgrade it without permission from a landlord.

Permanency, security and belonging

Even in economic downturns, holding onto your real estate in the long run means you continue to build equity and increase the chances of profiting. But financial perks comprise only one aspect of the benefits of home ownership. One of my recent columns focused on the psychological advantages, such as a sense of permanency, security and belonging. Homeowners and their families usually feel more grounded in a house or condominium than a rental dwelling. Home ownership is a visible representation of achieving a milestone in life that is deeply gratifying. This is something that never changes and is a major reason why homeownership remains the Canadian dream.