Lowering Canadian real estate market expectations for 2026 as activity remains weak

A major Canadian financial institution has lowered its expectations for the real estate market performance in 2026, amid continued weak activity during the first quarter of the year and accumulating economic pressures on buyers.
According to the new estimates, home sales are expected to decline by 1.8% year-over-year, while prices are likely to decrease slightly by about 0.3% nationally, reflecting the ongoing slowdown in the market.
This adjustment comes after weak performance over two consecutive quarters, as the market remains affected by multiple factors, most notably the slowdown in economic growth, rising living costs, in addition to the uncertainty that leads many buyers to hesitate.
The provinces of Ontario and British Columbia recorded the largest downward revisions in forecasts, due to the noticeable decline in activity during the first quarter and the ongoing housing affordability crisis, which pushes a wide segment of potential buyers to wait for further price drops before entering the market.
Estimates indicate that pent-up demand is no longer appearing as quickly as previously expected, which increases the likelihood of continued downward pressure on prices in the coming period, until balance between supply and demand is restored.
On the other hand, the market is expected to begin recovering starting in 2027, supported by improved economic conditions and the labor market, which may be reflected in increased sales and a gradual return of prices to an upward trajectory.

This scene reflects a transitional phase in the Canadian real estate market, characterized by caution and anticipation, as buyers and sellers seek to reassess their decisions within a changing economic environment.