Canada’s housing market is poised for a modest rebound in 2026 following a year marked by economic anxieties and declining sales. According to the Canadian Real Estate Association (CREA), national home sales decreased by 1.9% in December. This decline reflects a broader trend of heightened caution among buyers amid rising unemployment concerns and trade tensions with the United States.
Predicted Growth in the Housing Market for 2026
CREA anticipates a 5.1% increase in home sales in 2026, which is considered a slight recovery. Senior economist Shaun Cathcart noted that affordability remains a substantial barrier for many potential buyers. The ongoing shortage of housing supply in various regions is another key constraint on market activity.
Regional Market Developments
- St. John’s, Regina, and Quebec City experienced notable price increases, with Quebec City seeing a 17% year-over-year rise.
- Southern Ontario and British Columbia are expected to contribute significantly to the sales growth in 2026.
Conversely, major markets like Toronto and Vancouver faced severe slowdowns. In December, Toronto sales dropped to 62,433 units—the lowest since 2000—while Vancouver recorded 23,800 transactions, a figure lower than even during the 2008 financial crisis.
Challenges Ahead for Home Buyers
The Greater Toronto Area (GTA) reported an 11.2% decline in home sales compared to 2024. This downturn has prompted sellers to reconsider their strategies, with many questioning whether to sell now or wait for potential future gains. This evolving sentiment could weigh heavily on the market.
Additionally, Hamilton’s sales reached their lowest point since 2010, dropping 12% year-over-year. The influx of new listings has introduced downward pressure on home prices, reducing urgency among buyers.
Stable Markets Amid Uncertainty
In contrast, regions like Quebec and the Atlantic provinces have seen stable or even rising market activity. Analysts highlighted Quebec City as one of North America’s most undervalued markets.
In light of the current economic climate, some experts caution that the housing market’s future will depend heavily on the broader Canadian economy. A stronger labor market might drive demand, while a weaker economy could lead to further price reductions.
Outlook for Canada’s Housing Market in 2026
Although analysts predict stable interest rates from the Bank of Canada, economic uncertainties remain a concern. Upcoming trade renegotiations may influence market confidence and economic recovery.
The housing market in Canada will continue to face challenges and opportunities as 2026 unfolds, with economic conditions and housing supply dynamics playing crucial roles in shaping its trajectory.
