Canada’s Resale Housing Market: Expectations for 2026
Canada’s housing landscape has witnessed significant fluctuations in recent years, and the latest forecast from the Canadian Real Estate Association (CREA) outlines a cautiously optimistic outlook for the resale housing market in 2026. After a tumultuous recovery period during the latter half of 2025, the housing market is expected to regain some momentum, driven by pent-up demand, particularly among first-time homebuyers.
A Stop-Start Recovery
The recovery of Canada’s housing market can be characterized as stop-start, with economic uncertainties, especially surrounding U.S. tariff threats, impacting buyer confidence. Although the early part of 2025 was sluggish, a marked resurgence in sales activity began in April, with transactions increasing by a notable 12% by August. This uptick, however, led to a holding pattern as the year drew to a close.
As CREA’s January 15 update reveals, while 2025 did not see the anticipated rapid recovery, it set the stage for a more stable and gradual rebirth in 2026. The forecast emphasizes that Canada is in a stabilization phase rather than experiencing a significant market surge.
The Role of Pent-Up Demand
One of the key drivers anticipated to fuel the housing market in 2026 is pent-up demand, particularly from first-time buyers who have remained on the sidelines for much of the past four years. Many potential buyers have been waiting for more favorable conditions, and while interest rates have not plummeted as expected, there has been enough of a decrease to restore housing attainability for some.
The Bank of Canada’s announcement on October 29, 2025, indicating that interest rates likely cannot fall much lower, has further encouraged prospective buyers. This signal is expected to prompt many first-time homebuyers to take action, contributing to a revitalized housing market as we move into 2026.
Sales and Market Dynamics
Looking ahead, CREA forecasts that approximately 494,512 residential properties will be sold through MLS® Systems in 2026, marking a 5.1% increase compared to 2025. British Columbia and Ontario are poised to lead this recovery, with sales in these provinces projected to rise by more than 8%, buoyed by their previous deeper market slowdowns.
In contrast, other provinces may see more modest gains, as many are already closer to historical transaction norms. Additionally, supply constraints across various regions suggest that while demand may be rising, the availability of homes could temper sales growth.
Average Home Prices
In terms of pricing, the national average home price is expected to increase by 2.8% in 2026, reaching approximately $698,881. The pace of price growth will differ among provinces; British Columbia, Alberta, Ontario, and Nova Scotia are projected to experience more subdued increases. Conversely, markets in Saskatchewan, Quebec, and Newfoundland and Labrador are likely to see stronger price appreciation, although cooling trends are expected in previously hotter markets. For example, price increases in these regions are anticipated to slow from the 6% – 8% range in 2025 to between 3% and 6% in 2026.
Projections for 2027
Looking even further ahead to 2027, CREA anticipates another 3.5% increase in national home sales, bringing the total to approximately 511,966 transactions. This continued upward trajectory will again be led by the resilient markets in British Columbia and Ontario. The average home price is projected to edge up by 2.3% year-over-year to reach about $714,991. This will mark the seventh consecutive year that the national average hovers near the $700,000 mark, indicating an intriguing stability amidst fluctuating market dynamics.
Conclusion
As Canada’s housing market heads into 2026, the signs point towards a gradual recovery characterized by pent-up demand and more favorable economic conditions. Buyer sentiment, especially among first-time homebuyers, is expected to shift positively, paving the way for increased activity. The national forecast, while tempered, offers a hope of stabilization rather than staggering growth, underscoring the intricate balance of supply, demand, and economic influences that will shape the housing market in the coming years. CREA’s next quarterly forecast, set to be released on April 16, 2026, will provide further insights into this evolving landscape.
