The Canadian housing market is forecast to stabilize in 2026 with modest price growth expected nationally, though significant regional variations exist. Ontario and British Columbia are projected to see price declines, while other provinces may experience moderate gains. Sales activity is expected to decline in 2026 before a potential recovery in 2027, contingent on economic conditions and interest rate stability. This outlook matters to Canadians as it influences affordability, buying and selling decisions, and long-term financial planning for homeowners and prospective buyers.
National Sales and Price Forecast for 2026 and 2027
The Canadian Real Estate Association forecasts a 5.2 percent decline in national home sales for 2026, with an estimated 444,530 properties trading hands. This downward revision from earlier forecasts is attributed primarily to higher fixed mortgage rates and economic uncertainty stemming from global events. The national average home price is expected to edge higher by just 0.2 percent annually to $681,681 in 2026. This modest national figure masks significant provincial disparities, with price declines in British Columbia and Ontario offsetting gains elsewhere. Looking ahead to 2027, national home sales are forecast to climb 4.4 percent to 464,235 units, assuming slow economic growth and more certainty around interest rates. The national average price is then projected to increase 1.2 percent to $689,909, which would mark the seventh consecutive year prices have hovered near the $700,000 mark. CREA's next forecast update is scheduled for mid-January 2027, with the full schedule for 2027 statistics and forecast releases to be published in December 2026.
Divergent Provincial Price Trends and Market Conditions
Provincial housing markets are expected to follow distinctly different paths through 2026 and 2027. These declines in Canada's two largest provincial markets contrast sharply with expected price growth in other regions. Most other provinces are expected to see low-to-mid single digit annual price gains. By 2027, price growth is expected to cool nearly everywhere, with gains held below 2 percent in most provinces except Newfoundland and Labrador and Saskatchewan, where growth is forecast to moderate to 3.1 percent and 2.5 percent respectively. This forecast indicates a period of regional convergence, with previously hard-hit markets like Ontario beginning a slow recovery while previously robust markets in the Prairies, Quebec, and Atlantic Canada see more limited upside. The forecast for 2027 is predicated on slow but positive economic growth, the resumption of higher population growth, and more certainty for borrowers around the path for interest rates.
Key Economic and Demographic Factors Influencing the 2026 Market
Several interconnected economic and demographic factors are shaping the housing market outlook for 2026. High borrowing costs and uncertainty around future Bank of Canada interest rate moves are primary constraints on buyer activity. Fixed mortgage rates jumped higher in the spring of 2026 due to global energy market disruptions and the start of the Iran conflict, though they cooled somewhat over the summer before rising again in early September. Markets are now pricing in approximately 100 basis points of rate hikes by September 2027, though the current consensus of interest rate forecasts leans towards the Bank hiking by less than markets have priced in. The labour market is another critical factor, with employment conditions in British Columbia, for example, expected to improve in 2026 but with unemployment rates remaining historically high due to limited public sector job growth. International migration is forecast to continue declining in 2026, particularly for non-permanent residents, which impacts rental and investor demand and limits resale activity. Furthermore, consumer surveys detect rising optimism, with one national poll finding 36 percent of Canadians were optimistic the housing market would improve in 2025.
Fixed mortgage rates increased significantly in the spring of 2026 following the start of the Iran conflict. Oil prices and the risk of Bank of Canada rate hikes cooled over the summer but rose again by early September. This led to a more hawkish tone from the Bank of Canada and markets pricing in approximately 100 basis points of rate hikes. The recent shift in fixed-rate mortgage affordability has already resulted in lower home sales activity. Higher borrowing costs and ongoing economic uncertainty are key factors influencing the housing market outlook.
- High and uncertain borrowing costs and mortgage rates, with fixed rates reacting to global energy prices.
- Variable global economic conditions, including trade volatility, U.S. lumber tariffs, and weaker U.S. homebuilding activity affecting some provinces.
- A softening labour market in some regions, with slowing public sector job growth limiting recovery.
- Declining international migration, reducing rental and investor demand for resale properties.
- Persistent affordability challenges, especially for entry-level homes, despite improved affordability for higher-priced homes.
- Geopolitical events influencing commodity prices and economic confidence, creating on and off inflation risks.
- Weaker absorptions and high material and regulatory costs challenging new construction projects.
Regional Deep Dive: British Columbia's Housing Market Dynamics
The British Columbia housing market is experiencing a specific set of challenges and transitions in 2026. The provincial economy is expected to improve after limited growth in 2025, though sectors tied to technology and professional services are forecast to play an increasingly large role in driving housing demand, especially in major urban centres. New home construction is expected to trend lower in 2026, a departure from earlier forecasts of a slight increase, and will continue to decrease later in the forecast period due to weak supply and demand. A significant decline in condominium presales in Vancouver and Victoria has stalled many planned projects, with more postponements or cancellations expected to extend into 2027 and 2028. Rental construction is also projected to slow in the second half of 2026 as developers respond to higher vacancy rates and slower rent growth observed in the 2025 Rental Market Report. The resale markets in Vancouver and Victoria, after a historically weak 2025, are expected to show some recovery in 2026, though this rebound will likely remain below historical averages. Resale prices in the province are expected to rise moderately in 2026 as markets shift toward more balanced conditions, but price growth beyond 2026 is likely to remain low, with average prices unlikely to reach previous peaks.
Ground-oriented construction in British Columbia, representing single-detached, semi-detached and townhomes, will stay relatively stable in 2026, with some growth expected in 2027 and 2028. While single-detached homes will continue to be weak in the Vancouver CMA, these homes will still be in demand, especially in more affordable regions like Victoria and Abbotsford. At the same time, demand for denser ground-oriented homes will increase in the Vancouver CMA, as they offer a more affordable option. The ongoing slump in B.C. was little changed in July 2026 with monthly sales gains in Victoria and the Fraser Valley offset by a setback in Vancouver following two solid monthly gains. Prices declined again province-wide in that month, led by drops in Vancouver and the Fraser Valley.
Current Market Activity, Inventory Trends and Regional Shifts
Recent market data from mid-2026 shows a market in a delicate state of rebalancing. Home resales edged up 0.5 percent in July 2026 from June, marking the fourth consecutive monthly rise. The national aggregate MLS Home Price Index increased for a second consecutive month-over-month, a pattern not seen since early 2024, suggesting home values may have hit a cyclical bottom. A key factor in this stabilization is inventory, which is edging lower in Ontario and British Columbia after accumulating rapidly in prior years, helping to put a floor under prices. This rebalancing has come partly from fewer sellers listing properties, with new listings down meaningfully in 2026, including a 1.6 percent drop in July from June, which should ease earlier fears that a mortgage renewal cliff might give way to a wave of distressed selling. Despite these positive signs, the market remains generally soft. July's seasonally adjusted annualized transactions of 457,500 units were 12 percent below the 10-year average. The rate of improvement is incremental, and it would take about two and a half years to return to average activity levels at the recent pace of advance.
There has been further progress in Ontario with home resales rising in July in Toronto, Hamilton, Kitchener-Waterloo, London and Ottawa, and home values increasing in Toronto and Ottawa, though July's transactions and benchmark prices were still below a year ago across most of Ontario. Cooling of Alberta's market has stabilized since spring despite a slight pullback in July resales, with prices edging higher but remaining below a year ago except in Edmonton where the MLS HPI came back in the black in June 2026. Some signs of topping out have emerged in the rest of the country, with home resales moderating so far this year in Saskatchewan, Manitoba, Quebec and Atlantic Canada. Regina, Saskatoon, Winnipeg, Montreal, Quebec City, Moncton and Prince Edward Island saw monthly declines in July 2026. Home values continue to appreciate in these regions but at generally slower rates, with annual gains in most Quebec markets including Montreal and Quebec City now less than half what they were at the start of 2026. Halifax's MLS HPI dipped below a year ago in both June and July 2026.
Buyer Behaviour, Compromise and Shifting Priorities
Faced with persistent affordability challenges, Canadian homebuyers are demonstrating a significant willingness to adjust their expectations. A REMAX survey found 65 percent of respondents would make at least one compromise to afford a larger or more suitable home, while 63 percent would relocate to a home that better meets their needs. Location is a primary area of flexibility, with 47 percent willing to move up to an hour from their current community and another 16 percent willing to move even farther. Thirty-one percent would live farther from a city centre, and 21 percent would live farther from shops, restaurants and other amenities. Compromises on the property itself are also common, with 20 percent willing to purchase an older home or one requiring renovations. Another 24 percent would extend their mortgage amortization period, and 20 percent would accept financial help from family. Seventeen percent would take on a second job or additional income source, and another 17 percent would delay retirement or other long-term savings.
Despite this flexibility, core priorities remain fixed, with affordability cited as the top consideration by 60 percent of respondents, followed by neighbourhood safety at 47 percent. For buyers who can make a move, slower sales and greater choice in some markets can provide more time to compare properties and hold firm on their most important priorities. According to data supplied by REMAX brokers and agents, home sales declined year over year in 81 percent of markets analyzed between January 1 and July 31, 2026, while average residential prices increased in 56 percent of markets. Buyer-favourable conditions are also more widespread than anticipated heading into the year, with 32 percent of markets analyzed expected by REMAX brokers and agents to sit firmly in buyers' territory this fall. The softer sales environment has been more pronounced than anticipated, with REMAX Canada's fall outlook adjusted to sales finishing approximately two percent below 2025 levels.
New Construction, Rental Market and Condominium Segment Outlook
The outlook for new housing construction is softening across Canada, influenced by economic headwinds and shifting demand. In British Columbia, new home construction is forecast to trend lower in 2026 following strong apartment segment activity in 2025. Apartment construction in urban centres, previously driven by favourable policy and financing incentives for rental supply and consistent demand, faces increasing challenges from rising costs as builders cite this as a significant barrier. Condominium project postponements and cancellations are expected in 2026, with effects extending into 2027 and 2028. Rental construction is also projected to start slowing in the second half of 2026 as developers respond to higher vacancy rates and slower rent growth observed in 2025. While many projects currently in the pipeline will contribute to housing starts in 2026, a continuous slowdown in project proposals and construction is expected into 2028. Similar to condominium construction, developers face challenges from high material and regulatory costs, weaker rent growth and slower absorptions, making new rental projects increasingly difficult.
The condominium segment is specifically noted as an exception to generally stable conditions through the remainder of 2026, indicating particular softness in that market. Softer rental markets will dampen individual investor activity, especially in the condominium market. Sales growth in major markets like Vancouver and Victoria is likely to slow in 2027 and 2028 due to ongoing demographic and pricing challenges, with softer rental markets further reducing investor activity. Expectations of interest rate increases in 2027 may prompt some waiting buyers to enter the market sooner in 2026, but improved affordability is expected to boost resales mainly for higher-priced homes, while entry-level home prices are expected to stay steady.
Market Recovery Pace and Long-Term Trajectory
The recovery in Canada's housing market remains on track but is expected to be gradual and prolonged. The market's recent winning streak is encouraging, but the reality is that it is still generally soft, with any pick-up in momentum poised to be gradual due to interest rates no longer declining, stalled population growth and lingering economic uncertainty. It would take about two and a half years to return to the average activity level at the pace of advance seen in the last two months of mid-2026, indicating this is not a fast track to recovery. There is room for the market turnaround to accelerate a bit as confidence rebuilds, but progress will be incremental. We expect lower prices, improving affordability and better job prospects to slowly unlock pent-up demand in Ontario. On the other hand, steady or deteriorating affordability as well as sensitivity to geopolitical events and immigration cuts are poised to restrain growth in other markets that previously thrived, such as parts of the Prairies, Quebec and Atlantic Canada. The national average home price is forecast to climb 1.2 percent from 2026 to $689,909 in 2027, again little changed from CREA's July forecast, with gains expected to be held to below 2 percent everywhere but Newfoundland and Labrador and Saskatchewan.
This forecast would mark the sixth and seventh consecutive years that the national average home price has hovered close to the $700,000 mark. The forecast for 2027 is predicated on slow but positive economic growth, the resumption of higher population growth, and more certainty for borrowers around the path for interest rates which should bring more pent-up demand into the market even with higher borrowing costs. The current consensus of interest rate forecasts is leaning towards the Bank of Canada hiking by less than markets have been pricing in, which provides a base for the 2027 outlook. CREA's next forecast will be published mid-January 2027, providing an updated view based on the economic conditions and market data available at that time.
Frequently asked questions
What is the housing market prediction for 2027 in Canada?
For 2027, national home sales are forecast to climb 4.4 percent to 464,235 units. The national average home price is projected to increase 1.2 percent to $689,909. This forecast assumes slow economic growth, a resumption of higher population growth, and more certainty around the path of interest rates. Most provincial markets are expected to see sales gains between 3 percent and 6 percent, though price growth is forecast to be held below 2 percent in most regions.
Is 2026 a good time to buy a house in Canada?
Market conditions in 2026 are characterized by slower sales and greater choice in many regions, with 32 percent of analyzed markets expected to favour buyers. This can provide more time for a deliberate purchasing process. Many buyers are adapting by compromising on location, property type, or condition, with 65 percent willing to make at least one trade-off. Affordability remains a top concern, but the environment may allow buyers to hold firm on core priorities like neighbourhood safety.
Why are Canadian home sales declining?
Home sales are forecast to decline about 5 percent in 2026 due to several factors. High and uncertain borrowing costs are a primary constraint, with fixed mortgage rates having jumped higher due to global events. Economic uncertainty, a weaker labour market in some regions, and declining international migration also contribute to softer demand. Furthermore, high accumulated listings and a softer rental market have dampened investor activity, particularly in the condominium segment.
Will Canadian house prices go down in 2026?
The national average home price is forecast to edge higher by just 0.2 percent in 2026 to $681,681. This overall stability masks significant provincial variations. In contrast, other provinces are expected to see price growth in the low to mid single digits. Therefore, while the national figure shows minimal change, prices in certain major markets like Ontario are anticipated to fall.
How are Canadians adapting to afford homes?
Canadians are adapting to affordability pressures by making substantial compromises on their path to homeownership. A survey found 65 percent of respondents are willing to make at least one trade off, such as reconsidering location or the type of home they buy. Nearly two thirds would relocate for a suitable home, with 47 percent willing to move up to an hour from their current community. Buyers are also reconsidering properties, with 20 percent willing to purchase an older home or one requiring renovations.
Sources and further reading
- Housing Market Outlook 2026 cmhc-schl.gc.ca
- CREA Revises Resale Housing Market Forecast crea.ca
- Provincial Resale Market Outlook: High Borrowing Costs Set ... economics.td.com
- Canadian Housing Market Outlook (Fall 2026) blog.remax.ca
- Slowly but surely Canada's housing market is turning around rbc.com
This article explains how things work and is not financial, tax or legal advice. Rules, limits and rates change, so check the current figures with the Canada Revenue Agency, your province or your financial institution before you act.