# Waiting for the real estate bottom

By [Brandon Donnelly](https://brandondonnelly.com) · 2026-02-25

real-estate, housing, residential, canada, bis, home-prices

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![](https://storage.googleapis.com/papyrus_images/02b0d530b14cd70c8ba8a86a6f185d99bb1b5971ba526581739d8dbdaab24cae.png)

![](https://storage.googleapis.com/papyrus_images/0611b97b72cbc1fb056420f65d8a2feae3df3232209deedf3d68f76f1d1e3cdf.png)

Deflation is bad for economies.

That is why the typical standard for most central banks is a target inflation rate of 2%. This leaves a factor of safety in case you miss your target. Because if you target 0% and end up with a negative number, then you're in trouble. A negative number is significantly worse than moderate inflation. The principal problem with deflation is that consumers start expecting goods and services to be cheaper next month and stop buying non-essential items, creating a vicious cycle with prices.

I think we are seeing this same psychology play out with real estate in Canada (though not in every local market). According to the [above charts from the BIS](https://www.bis.org/statistics/pp_residential_2602.htm), real residential property prices across Canada were down just over 5% year-over-year in Q3-2025. And since Q4-2019, they were cumulatively down 5.45% (but up ~45% since 2010 after the Great Financial Crisis). Right now, many buyers are waiting on the sidelines, just in case things get cheaper.

But [I expect things](https://brandondonnelly.com/my-predictions-for-2026) to stabilize and feel better toward the end of 2026 and into 2027. And once that happens, a different buyer psychology will come to the fore.

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_Cover photo by_ [_Anthony Maw_](https://unsplash.com/@anthonymaw?utm_source=unsplash&utm_medium=referral&utm_content=creditCopyText) _on_ [_Unsplash_](https://unsplash.com/photos/a-city-with-snow-covered-mountains-GWRuNS8Y0KM?utm_source=unsplash&utm_medium=referral&utm_content=creditCopyText)

_Charts from_ [_BIS_](https://www.bis.org/statistics/pp_residential_2602.htm)

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*Originally published on [Brandon Donnelly](https://brandondonnelly.com/waiting-for-the-real-estate-bottom)*