Housing Slump Limits Impact of Canada Stock Market Gains
Canada's housing slump is curbing spending despite record stock gains. Analysts say falling home prices have a greater impact on consumers than financial assets.
Canada home prices fell 20% since February 2022, marking the longest housing slump in recent decades. It was the only G7 nation to post nominal home price declines in 2025 despite a record-high domestic stock market. This divergence is stifling consumer spending, as housing wealth impacts the economy more than the concentrated gains of financial assets. The housing market slump has been exacerbated by slower growth in immigration, which reduced demand for housing.
### Why Housing Trumps the TSX Record Canadian household net worth rose C$1 trillion to C$18.6 trillion in 2025, driven by a 28.2% gain in the domestic stock market. However, property values have dropped 20% from their February 2022 peak. CIBC Capital Markets economists Benjamin Tal and Katherine Judge estimate this housing correction could reduce consumption by over C$5,000 per household.
