At the start of 2022, the typical house in Australia and Canada was worth about $840,000 in each country's local currency. Since then, Australian prices have climbed by about A$85,000, while Canadian prices have crashed by C$150,000, leaving the median Canadian home nearly 20% cheaper. This divergence has raised questions about whether Australia could face a similar correction.
Toronto's pandemic buying boom saw home sales surge in 2021, then halve by 2023 as high numbers of homes arrived on the market simultaneously, dragging down prices. Demand slumped further as locals fled for more affordable towns with remote work. One investor paid C$1m for a sub-50 square metre flat in downtown Toronto's Yorkville neighbourhood that is now worth about C$700,000. 'We're seeing a lot of landlords panic,' said Tyson Erlick of Property Management Toronto. 'You're now looking at a mega loss.'
In contrast, Sydney endured a brief slump but resumed its upward climb by early 2023, with rents and home prices rising as a growing population grappled with a shortage of homes. Australian home values have kept rising through 2025, up 3.7% in the year to July according to property data firm Cotality, and Commonwealth Bank analysts predict that pace will reach 6% by December.
Both countries saw a rare nationwide price drop when interest rate hikes in 2022 limited borrowing power, though Australians faced slower and smaller rate increases. Along with surging migration and strong job creation, smaller rate hikes kept Australian prices from falling more than 10%, according to Eliza Owen, head of research at Cotality. 'As long as Australians can keep paying their mortgage and they don't have to sell, that will always restrict supply [and] limit the amount that property values can fall,' she said.
An economic shock and blowout in the unemployment rate would be a direct but damaging way for that momentum to reverse, Owen said. 'That technically would make housing cheaper, but it doesn't necessarily make housing more affordable if a crash is coming alongside severe economic downturn [and] people really can't afford to buy.' Donald Trump's tariff threats have prolonged Canada's crash by pushing more Canadians out of work, leaving buyers without incomes and unable to pay off their mortgages. The number of unemployed Canadians reached 1.6 million and the national unemployment rate climbed to 7% in May, from 5% in early 2023.
