Canada’s housing market has posted the sharpest decline in home prices among advanced economies, according to new data from the Bank for International Settlements (BIS).

Inflation-adjusted house prices in Canada fell five percent year-over-year in the third quarter, matching China for the largest drop among comparable nations. Finland followed with a four percent decline, while New Zealand, Israel, Romania, Austria and Hong Kong also recorded decreases. In contrast, real house prices were broadly stable across advanced economies overall, with many countries still seeing growth.

Looking at the longer-term trend, Canada’s downturn stands out even more. From the first quarter of 2022 to the third quarter of 2025, nominal home prices dropped 18 percent — the largest fall among advanced economies and slightly worse than China’s 17.8 percent decline. By comparison, South Korea, Germany and Sweden saw far smaller contractions. Meanwhile, prices in the United States and United Kingdom rose 12.3 percent and 8.9 percent respectively.

The slide follows a dramatic pandemic-era boom. After prices surged nearly 50 percent between 2010 and 2025, the market peaked in early 2022 as the Bank of Canada began aggressively raising interest rates. Higher borrowing costs, economic uncertainty and slowing population growth have since cooled demand.

Recent data from the Canadian Real Estate Association suggests the slowdown may persist, with economists warning that 2026 could bring another subdued year for the housing market.