What are the prospects for Canada’s housing market in 2026?
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National home sales in Canada declined 1.9 per cent in December compared with the same period a year earlier, according to a report published Wednesday by the Canadian Real Estate Association (CREA), capping a year that saw low interest rates but heightened economic concerns.
In some Canadian markets, buyers are scared and completely on the sidelines in 2025 increased unemployment and fears arising from the US trade war.
But there was healthy growth in activity and prices in markets like St. John’s, Regina and Quebec City – the latter city saw a massive 17 per cent increase year-over-year – as the Bank of Canada reduced its prime interest rate By a full percentage point in 2025.
“Market observers would be wise to resist the temptation to trace a line from late 2025 to 2026,” CREA senior economist Shawn Cathcart said in a statement.
“We expect sales to pick up again as we approach spring, rejoining the growth trend seen in the spring, summer and early autumn of last year.”
Still, realtors and economists who spoke to CBC News say prices remain out of reach for many potential homeowners, and new uncertainty over U.S. relations could keep some first-time buyers away from the market in the new year.
what to expect next
Home sales in two major markets hit 20-year lows in December. only 62,433 houses were sold in Toronto last year (lowest level since 2000), while in Vancouver Sales of 23,800 houses were recordeda figure even lapped By the number of homes sold during the 2008 financial crisis.
John Pasalis, president and broker of Realosophy Realty, said Toronto’s housing market may be turning the page on a sluggish year, but 2026 is “showing signs of more of the same.”
“If we see an uptick (this year), it’s down from a 25-year low,” Pasalis said. He said economic fears and uncertainty arising from the US trade war may continue to impact the housing market, making any significant rebound unlikely in the near future.
Home sales in the GTA declined by 11.2 per cent last year compared to 2024, according to a new report from the Toronto Regional Real Estate Board.
Last year marked a turning point in Toronto’s housing market as prices downward trend started again after a pandemic-induced surge.
“Now a lot of sellers are thinking, ‘If I wait six months, I might get less money than if I sold today,'” he said. “And that’s a huge change in sentiment.”
More broadly, housing markets in southern Ontario and parts of BC have cooled, with an influx of new listings putting downward pressure on home prices. Hamilton home sales slowest in December since 2010That’s a 12 percent decline year over year, according to the area Realtors Association.
“There’s a lot of inventory in those markets. So there’s less need for buyers to move quickly,” said Robert Hogg, assistant chief economist at RBC.
Elsewhere – including Quebec, the Atlantic provinces and parts of the Prairies – activity has been stableEven hot.
Economic fears could further hamper activity
Still, Hogg cautioned that the current housing market in areas where activity has slowed should be viewed in the context of the COVID-19 surge in home prices, when smaller cities in southern Ontario (like London, Kitchener and Waterloo) saw “tremendous increases.”
“What we’re seeing now is a partial reversal of those trends. So because price increases were more significant in those areas, the recovery is also a little more significant,” he said.
According to Hogg, where the housing market goes next depends partly on the direction of the Canadian economy. For example, if the labor market picks up, demand may strengthen and hold down prices; But if the economy proves weaker than expected, prices could fall further, he said.
Although analysts do not expect the Bank of Canada to raise interest rates in the near future, the central bank has Said its approach may changeEspecially as trade uncertainty increases upcoming renegotiation On the CUSMA trade agreement.
“We’re likely to remain concerned about the direction of the market for a large portion of the year, given all this economic uncertainty and continuing questions about the labor market and how quickly it will recover,” Hogg said.
