Canada's housing market poised for a reset in 2026, with modest price growth and increased activity
Canada's housing market poised for a reset in 2026, with modest price growth and increased activity |
| [09-December-2025] |
Improved affordability expected to draw Canadians back into the market through 2026 Highlights:
TORONTO, Dec. 9, 2025 /CNW/ - After a tumultuous 2025 marked by economic and political shifts, 2026 emerges as a crucial reset year for Canada's housing market. According to the Royal LePage Market Survey Forecast, Canada's residential real estate market is expected to post modest price gains next year and an increase in sales activity, as buyers continue to move off the sidelines. The aggregate1 price of a home in Canada is set to remain relatively flat, increasing a modest 1.0 per cent year over year to $823,016 in the fourth quarter of 2026. The median price of a single-family detached property is expected to increase 2.0 per cent to $876,934, while the median price of a condominium is anticipated to decrease 2.5 per cent to $563,918.2 "Solid market fundamentals – including lower interest rates, increased supply, and reduced competition – have created a more favourable environment for consumers," said Phil Soper, president and chief executive officer, Royal LePage. "First-time buyers and those searching in the country's most expensive regions have a rare window to act on their home ownership plans at reduced prices. While we don't expect a sharp rebound, this improved affordability will rebuild market confidence among both buyers and sellers, setting the stage for more sustainable, albeit modest, price growth in 2026." Home prices are expected to rise in major markets across the country in 2026, with the exception of Canada's two most expensive cities. The aggregate price of a home in the Greater Toronto Area and Greater Vancouver is forecast to decrease 4.5 per cent and 3.5 per cent year over year in the fourth quarter of 2026, respectively. During the same period, the aggregate price of a home in the Greater Montreal Area is expected to rise 5.0 per cent. For the second consecutive year, Quebec City is forecast to see the greatest gains among all major regions, with an anticipated increase in the aggregate home price of 12.0 per cent. Regina, which continues to see robust demand and constrained supply, is anticipating a 4.0 per cent increase in home prices over the same period. Meanwhile, Ottawa, Calgary, Edmonton, Halifax and Winnipeg are expected to see prices rise no more than two per cent in 2026. "2025 forced us to recalibrate. Indications are that Canadians are now increasingly adapting to the noise from Washington and confidence at home is holding firm. We saw steady, incremental growth in sales activity in the back half of the year – a clear sign that those who put major decisions on hold are ready to move forward in 2026," said Soper.
Rate cut cycle comes to a close In 2025, the Bank of Canada reduced its target for the overnight lending rate four times, bringing the key rate down to its current level of 2.25 per cent. After an 18-month rate-cutting cycle that followed two-decade-high interest rates, the Bank has now shifted its focus to supporting a cooling economy while keeping inflation on a sustainable path. Economists widely expect the Bank will only make further cuts if the economy shows major signs of weakness as Canada continues to navigate trade tensions with the United States. "Mortgage rates are no longer the villain in this story. Borrowing costs have stabilized at a level that supports healthy market activity. Buyers can move forward without worrying they are missing out on cheaper money tomorrow. That clarity alone will unlock demand," concluded Soper. According to a recent Royal LePage survey, conducted by Burson, 28 per cent of Canadians who currently rent say that, before signing or renewing their current lease, they considered buying a property rather than renting.3 When asked what factors influenced their decision to rent instead, 40 per cent of respondents said they were waiting for property prices to decline, and 29 per cent were waiting for interest rates to decrease further. Respondents could select more than one answer.
Building efforts intensify, but barriers to boost supply remain Stakeholders across the country are making efforts to increase housing inventory, though not without facing headwinds. According to a recent Canada Mortgage and Housing Corporation (CMHC) report, combined housing starts in Canada's seven major census metropolitan areas during the first half of 2025 remained near record highs, coming in just below 2024 levels.4 Yet, the push to grow supply has played out unevenly across the country. Strong gains in housing starts in Calgary, Edmonton, Montreal and Ottawa were offset by weaker investor demand in Toronto and Vancouver, illustrating sharp regional differences. Building activity in Canada's most expensive cities has been hit particularly hard. As of mid-2025, Toronto is on pace for its lowest level of housing starts in three decades. This coincides with a major slowdown in pre-construction sales, which have continued to drastically decrease as investor demand has declined this past year, prompting project cancellations and delays. Vancouver is experiencing similar pressures and is expected to see a further decline in total housing starts this year, according to the report. "Increasing supply remains critical to achieving long-term affordability. We cannot afford to scale back on efforts to meet the country's pent-up housing demand, even if buyer and investor activity has softened in the short term," said Soper. "Building the right types of homes is equally important. Missing-middle options like duplexes, triplexes and townhomes provide the balance of space and density Canadians are seeking, without driving development further outward through unnecessary urban sprawl. Cities such as Edmonton and Calgary highlight what's possible when housing construction is guided by intention, flexibility and a commitment to affordability. That's the direction Canada must continue to pursue."
Government stability brings renewed focus to housing "2026 sees key market fundamentals pointed in the right direction. Recent polls indicate Canadians are satisfied with our political leadership, opening the door for much-needed progress on housing policy," said Soper. "The 2025 federal budget laid important groundwork – from funding commitments into Build Canada Homes (BCH) to major infrastructure projects – but the real test will be how effectively those measures are executed in the year ahead. If Ottawa follows through, 2026 could be the year we start to see long-promised initiatives turn into real progress for the Canadian real estate industry." Introduced in September, BCH is a new government agency responsible for developing, financing and managing affordable housing projects. As part of its first initiative, six public land sites under the Canada Lands Company portfolio have been earmarked to deliver 4,000 factory-built homes. "2026 will be a transition year for Canada's housing market, as improved affordability and less competitive conditions continue to favour buyers. We expect activity to build slowly over the next several months, and if the spring market coincides with steadier economic and trade conditions, buyer confidence could strengthen in tandem. "Canada's housing market is moving forward again," Soper concluded. "Improved conditions are drawing buyers back, step by step. The reset is behind us – now we build." Royal LePage 2026 Market Survey Forecast Table: rlp.ca/table-2026-forecast MARKET SUMMARIES Greater Toronto Area In the Greater Toronto Area, the aggregate price of a home in the fourth quarter of 2026 is forecast to decrease 4.5 per cent year over year to $1,054,129. During the same period, the median price of a single-family detached property is expected to decrease a modest 1.0 per cent to $1,382,832, while the median price of a condominium is forecast to decline 6.5 per cent to $615,885. "Our fall market was more of a whisper than a roar. In a typical cycle, this would be one of the busiest times of the year to buy and sell, but that hasn't materialized. It's not simply that buyers are trying to time the best deal. Economic uncertainty is keeping many on the sidelines, particularly concerns around job security and ongoing tariff discussions. With no real urgency to make a move, buyers are taking their time, weighing their decisions and moving with far more caution than we saw just a few years ago when competition was intense and choices had to be made quickly," said Shawn Zigelstein, broker and leader of Team Zold, Royal LePage Your Community Realty. "Another factor shaping buyer hesitation is the potential shift back to in-office work. With more employers signalling a return to brick-and-mortar workplaces five days a week, many Canadians are unsure what their future commute will look like, making it harder to decide where to put down roots. "The good news for consumers is that softer competition is creating meaningful opportunities, especially as prices continue to ease. We have seen a year-over-year increase in transactions for freehold properties under $1 million, which tells us that some buyers are capitalizing on current market conditions." Zigelstein noted that the slowdown in the new construction segment is likely to continue for now. Builders have paused the launch of new projects and scaled back their marketing efforts. To move existing inventory, some developers are offering incentives such as price reductions or more flexible closing timelines. "I expect market activity to remain fairly flat throughout the winter, with any material shift unlikely to emerge before the spring. Even with several interest rate cuts already behind us, we haven't seen a noticeable boost in buyer engagement, which tells us the slowdown is being driven by factors beyond borrowing costs alone," said Zigelstein. "If we do see a rebound, it's unlikely to happen overnight. A recovery will probably build gradually as confidence improves, economic signals stabilize, and buyers begin to feel more secure in making long-term decisions." Royal LePage 2026 Market Survey Forecast Table: rlp.ca/table-2026-forecast Greater Montreal Area In the Greater Montreal Area, the aggregate price of a home in the fourth quarter of 2026 is forecast to increase 5.0 per cent year over year to $676,725. During the same period, the median price of a single-family detached property is expected to rise 6.0 per cent to $796,908, while the median price of a condominium is forecast to increase 2.5 per cent to $502,558. "The Greater Montreal market was characterised by sustained demand for properties under $1 million, while the luxury segment saw weaker activity in the last quarter," said Marc Lefrançois, chartered real estate broker at Royal LePage Tendance. "Despite a slight dip in activity in October, and a more pronounced slowdown in the city centre and Laval, we are seeing that Quebec consumers seem less affected by economic uncertainty and trade tensions than in other parts of the country." Lefrançois adds: "Interest rates, which buyers now consider reasonable, contribute to a sense of confidence. Overall, demand for 2026 is expected to remain similar to that of 2025, or even slightly better. Inventory is steadily increasing, but not alarmingly so, which offers buyers more choice, particularly those opting to purchase in Montreal's suburbs, which are considered more affordable for young families." Royal LePage 2026 Market Survey Forecast Table: rlp.ca/table-2026-forecast Greater Vancouver In Greater Vancouver, the aggregate price of a home in the fourth quarter of 2026 is forecast to decrease 3.5 per cent year over year to $1,147,868. During the same period, the median price of a single-family detached property is expected to decline 5.0 per cent to $1,610,915, while the median price of a condominium is forecast to decrease 3.0 per cent to $712,853. "Momentum in the Vancouver housing market continues to decline. Sales remain well below the region's ten-year average, and growing inventory levels are sitting longer as buyers hold back. This year's slower-than-usual fall market suggests that softer conditions may persist for some time," said Randy Ryalls, managing broker, Royal LePage Sterling Realty. "When we look at why buyers are hesitating, two groups stand out: those concerned about the broader economy, and those trying to time the market for a better deal. With plenty of inventory available and prices edging downward, there is little urgency for buyers to move quickly. In this environment, many feel comfortable waiting, watching and weighing their options before making a decision." Ryalls noted that many move-up buyers are stuck in a 'chicken and egg' situation. Without securing a buyer for their current home, they're unable to move forward with their next purchase. As a result, the region has seen a noticeable increase in 'subject to sale' transactions, as buyers try to bridge the gap between selling and buying in a slower market. "Looking ahead, another rate cut or two could give the market the lift it needs, although that seems unlikely now. A drop in inventory levels might also help motivate buyers as we enter the new year," added Ryalls. "As we saw during the COVID years, some buyers respond strongly to a fear of missing out, and even a modest shift in market conditions could be enough to bring them off the sidelines. A small nudge could help drive more activity in 2026." Royal LePage 2026 Market Survey Forecast Table: rlp.ca/table-2026-forecast Ottawa In Ottawa, the aggregate price of a home in the fourth quarter of 2026 is forecast to increase 2.0 per cent year over year to $788,970. During the same period, the median price of a single-family detached property is expected to rise 3.5 per cent to $907,488, while the median price of condominium is forecast to increase 1.0 per cent to $408,646. "Looking ahead to next year, we expect activity in the Ottawa housing market to return to more typical levels, with prices increasing by low single digits. Sales activity should follow a more cyclical rhythm – a brisk spring market, a slowdown during the summer months as families take vacations, and another boost after Labour Day," said Jason Ralph, president and broker of record, Royal LePage Team Realty. "Encouragingly, we've already seen a jump in buyer demand following several rate cuts this fall, and with the Bank of Canada indicating that further cuts are unlikely in the near term, many sidelined buyers are beginning to re-enter the market." Ralph noted that what consumers are really looking for is stability, and greater consistency in lending rates, paired with a potential trade deal, will go a long way in restoring confidence. "While there has been some concern around federal workforce reductions, we do not anticipate a dramatically negative impact on the local housing market. Most of these changes are expected to occur through attrition and retirement, which could in fact lead to a modest boost in recreational property sales, as some homeowners transition into new lifestyles," added Ralph. "Both buyers and sellers are adjusting their expectations to reflect market realities. Overall, Ottawa's real estate economy continues to prove its stability and resilience. With increasing demand, steady prices, and a market environment that remains fundamentally healthy, we expect to see continued strength through 2026." Royal LePage 2026 Market Survey Forecast Table: rlp.ca/table-2026-forecast Quebec City In Quebec City, the aggregate price of a home in the fourth quarter of 2026 is forecast to increase 12.0 per cent year over year to $501,984. During the same period, the median price of a single-family detached property is expected to rise 14.0 per cent to $536,598, while the median price of condominium is forecast to increase 5.0 per cent to $356,160. "The Quebec City real estate market will continue to stand out for its strength in 2026," said Francis Turmel, residential and commercial real estate broker with the Francis Turmel Team, Royal LePage Blanc & Noir. "With inventory remaining low and demand strong, pressure on prices will remain high. Lower interest rates have fuelled buyer optimism. It is clear that the Quebec City region will remain one of the most dynamic in the province." The single-family home segment, which is in highest demand, is expected to see a sharp rise in prices, with certain neighbourhoods such as Lebourgneuf, Montcalm and Cap-Rouge experiencing stronger and more sustained appreciation, as is typically the case. A more moderate increase is anticipated for condominiums. A slight slowdown was felt at the end of the year, mainly due to new regulations like Bill 16, and the sometimes more complex retrofitting of older condominiums. "Despite the competition, buyers have become accustomed to navigating a market with multiple-offer scenarios and are increasingly comfortable investing, given the continued appreciation of prices," added Turmel. "However, the rapidly changing market can make our clients vulnerable. That's why the support of an experienced real estate agent is more important than ever to guide them, reassure them and effectively defend their interests." Royal LePage 2026 Market Survey Forecast Table: rlp.ca/table-2026-forecast Calgary In Calgary, the aggregate price of a home in the fourth quarter of 2026 is forecast to increase 1.5 per cent year over year to $701,061. During the same period, the median price of a single-family detached property is expected to rise 3.0 per cent to $828,429, while the median price of a condominium is forecast to increase a modest 1.0 per cent to $265,832. "While activity has slowed from last year, it is still tracking above the 10-year average, supported by continued interprovincial migration from British Columbia and Ontario, and a local economy that is expected to outperform national growth. Looking ahead, Calgary's housing market is expected to remain consistent and balanced through next spring, with sales activity improving and home prices increasing modestly in 2026, driven by strong demand for detached homes," said Corinne Lyall, broker and owner, Royal LePage Benchmark. "Consumer confidence remains strong in Calgary, with most sidelined buyers simply waiting for clarity on where interest rates will land, or choosing to resume their search after the winter season," noted Lyall. "The market continues to reflect a tale of two segments: the condo market, firmly in buyers' territory due to a surplus of inventory, is weighing on overall price performance. Meanwhile, competition in mature neighbourhoods closer to downtown remains much tighter, driven by limited redevelopment opportunities and larger lots that rightfully command a premium." Lyall added that new developments at the city's edge offer significantly more inventory and choice for buyers, particularly in the $800,000 to $1 million range, where much of the new construction activity is concentrated, making this segment attractive to first-time buyers and price-conscious purchasers. "At the upper-end of the market, homes priced above $2 million continue to perform exceptionally well, underscoring the depth and diversity of demand across Calgary, which is still one of the most stable and resilient housing markets in the country. Overall, conditions are now better aligned between supply and demand, creating a healthier environment where buyers benefit from more choice, and sellers are adjusting to more realistic expectations." Royal LePage 2026 Market Survey Forecast Table: rlp.ca/table-2026-forecast Edmonton In Edmonton, the aggregate price of a home in the fourth quarter of 2026 is forecast to increase 2.0 per cent year over year to $480,930. During the same period, the median price of a single-family detached property is expected to rise 4.0 per cent to $542,568 while the median price of a condominium is forecast to increase just 1.0 per cent to $207,454. "While the market felt particularly strong coming into this year, momentum heading into 2026 feels more subdued – a return to a traditional real estate cycle we haven't seen in nearly a decade. Overall, sales volume will have been lower in 2025 compared to 2024, with similar levels expected next year. This reflects a market that is stabilizing after years of fluctuation," said Tom Shearer, broker and owner, Royal LePage Noralta Real Estate. "From the economic challenges of the 2015–2019 period, to the accelerated activity brought on during the COVID era, we're finally back to typical market conditions. Looking ahead, home prices are expected to increase modestly next year." Shearer noted that Edmonton remains one of the most affordable major markets in the country, and demand continues to be driven largely by local buyers, particularly for homes in the entry-level segment, like townhomes and condominiums. "The wave of buyers who moved here in recent years because of the city's affordability has tapered. The current buyer pool includes more demand from those who want to feel secure in their employment before making a move. Still, there is a sense of confidence in the market. Buyers are not concerned about overpaying and view home purchases as stable, long-term investments," said Shearer. "As consumers closely watch provincial policy decisions, alongside federal investment in the province's oil and gas sector, Edmonton continues to demonstrate resilience and upward potential. Balanced conditions and steady demand next year will reinforce the region's position as a stable and reliable place to own a home." Royal LePage 2026 Market Survey Forecast Table: rlp.ca/table-2026-forecast Halifax In Halifax, the aggregate price of a home in the fourth quarter of 2026 is forecast to increase 2.0 per cent year over year to $538,968. During the same period, the median price of a single-family detached property is expected to rise 4.0 per cent to $628,056, while the median price of a condominium is forecast to decrease 2.0 per cent to $391,804. "Market conditions across Atlantic Canada have been fairly consistent this year, and they are expected to remain much the same in the year ahead," said Matt Honsberger, broker and owner, Royal LePage Atlantic. "Halifax has maintained a consistent pace of activity, and although sales volumes are softer than expected, prices have held relatively steady. Buyers are gradually adjusting to today's borrowing environment, and despite some ongoing caution tied to broader economic and political uncertainty, many are recognizing that waiting may not lead to more favourable conditions. That shift in mindset is setting the stage for a more robust year ahead in the region's real estate market." Honsberger added that market trends across the Maritimes have aligned closely with expectations set at the beginning of this year, with limited movement in either direction. Halifax has remained steady, while markets like St. John's and parts of New Brunswick continue to see tighter supply and strong demand driven by relative affordability. Inventory levels are anticipated to rise modestly in 2026 as demand levels off, moving the region toward more balanced conditions. "As we look ahead to next year, I expect to see a gradual increase in sales as buyers become more comfortable with the current landscape and feel ready to move forward with long-term decisions," said Honsberger. "Improving affordability will encourage more households to enter the market. While we aren't anticipating major shifts, we do foresee a healthier pace of activity and steady, sustainable growth across Atlantic Canada in 2026." Royal LePage 2026 Market Survey Forecast Table: rlp.ca/table-2026-forecast Winnipeg In Winnipeg, the aggregate price of a home in the fourth quarter of 2026 is forecast to increase 1.5 per cent year over year to $419,195. During the same period, the median price of a single-family detached property is expected to rise 2.0 per cent to $462,264 while the median price of a condominium is forecast to increase 1.0 per cent to $274,720. "Winnipeg's housing market is heading into 2026 with resilience, following an increase in sales and price gains in 2025," said Michael Froese, broker and manager, Royal LePage Prime Real Estate. "Even as we move into the usual winter slowdown, demand remains healthy and buyers are acting when the right property hits the market. Interest rates are no longer the main driver of decision-making, with confidence in the local market playing a bigger role." Froese noted that prices have remained firm throughout the fall, supported by ongoing supply shortages. Inventory continues to be tight and supply levels next year are expected to mimic 2025. This will continue to place modest upward pressure on prices next year. "Looking ahead, demand is expected to remain steady through 2026, following normal seasonal patterns rather than any major spikes or dips," Froese said. "Buyer confidence and consistent demand should help maintain a balanced environment with modest price growth. While some uncertainty lingers around economic factors like employment and immigration, the market has shown strong underlying stability. I expect prices in Winnipeg will edge up modestly as low supply and consistent demand carry into the new year." Royal LePage 2026 Market Survey Forecast Table: rlp.ca/table-2026-forecast Regina In Regina, the aggregate price of a home in the fourth quarter of 2026 is forecast to increase 4.0 per cent year over year to $410,280. During the same period, the median price of a single-family detached property is expected to rise 4.5 per cent to $456,038, while the median price of a condominium is forecast to increase 2.5 per cent to $230,318. "Regina is heading into 2026 with a market that remains firmly supported by strong demand and limited supply," said Chad Ehman, sales representative, Royal LePage Next Level. "While activity naturally eased with the typical fall slowdown, the underlying momentum is still there. Buyers have adapted to today's borrowing conditions, and we are seeing fewer people waiting for further rate cuts before making a move. Well-priced homes continue to attract buyers, and tight inventory has been the defining theme of the past year, a trend that's expected to continue through 2026." Ehman noted that despite a modest seasonal cooling, sales this fall remained exceptionally strong. Prices held well above last year's levels, supported by limited supply, slower new construction, and steady population growth. With inventory expected to stay relatively low throughout 2026, conditions are likely to remain competitive, with gradual price increases across all property types. "This coming year is shaping up to be another one of steady, healthy growth for Regina's housing market," Ehman added. "Affordability continues to draw buyers, and confidence from both sides of the transaction remains strong. Unless a significant surge in new listings enters the market, we expect conditions to continue favouring sellers, with consistent demand and moderate price gains throughout the year." Royal LePage 2026 Market Survey Forecast Table: rlp.ca/table-2026-forecast About the Royal LePage Market Survey Forecast The Royal LePage Market Survey Forecast provides year-over-year and quarter-over-quarter price expectations nationally and for Canada's 10 most prominent real estate markets. Housing values are based on the Royal LePage National House Price Composite, produced quarterly through the use of company data in addition to data and analytics from RPS Real Property Solutions, the trusted source for residential real estate intelligence and analytics in Canada. Additionally, commentary on housing market trends and data on price and forecast values are provided by Royal LePage residential real estate experts, based on their opinions and market knowledge. About Royal LePage Serving Canadians since 1913, Royal LePage is the country's leading provider of services to real estate brokerages, with a network of approximately 20,000 real estate professionals in over 670 locations nationwide. Royal LePage is the only Canadian real estate company to have its own charitable foundation, the Royal LePage® Shelter Foundation™, which has been dedicated to supporting women's shelters and domestic violence prevention programs for more than 25 years. Royal LePage is a Bridgemarq Real Estate Services® company, a TSX-listed corporation trading under the symbol TSX:BRE. For more information, please visit www.royallepage.ca. Royal LePage® is a registered trademark of Royal Bank of Canada and is used under licence by Bridgemarq Real Estate Services®. SOURCE Royal LePage Real Estate Services | |||||||||
Company Codes: Toronto:BRE |
