Key Takeaways:
- The Canadian housing market is expected to be more balanced but uneven in 2026, with trade uncertainty being a major factor holding back housing activity in 2025.
- National aggregate home price is expected to increase 1% year-over-year to around $823,000 in the fourth quarter of 2026.
- Aggregate home price in the greater regions of Toronto and Vancouver is expected to decrease 4.5% and 3.5% year-over-year, respectively.
- Condominium prices are expected to decrease 2.5% to $563,918 year-over-year in the fourth quarter of 2026.
- Government involvement and coordination across municipal, provincial, and federal levels will be crucial in shaping the future of the housing market.
Introduction to the Canadian Housing Market
The Canadian housing market is entering 2026 in a more balanced but uneven state, according to Royal LePage’s CEO Philip Soper. After a year of economic uncertainty, shifting immigration levels, and new federal leadership, the market is expected to be shaped by various factors, including trade uncertainty, interest rates, and government policies. In an interview with BNN Bloomberg, Soper discussed the trends that have been observed in the market during 2025 and what can be expected in the coming year.
Trade Uncertainty and Its Impact
Trade uncertainty, particularly around tariffs, emerged as the single biggest factor holding back housing activity in 2025, according to Soper. Despite other traditional barriers easing, such as interest rates and employment conditions, trade concerns had a significant impact on the market. Soper estimated that the drag from trade concerns likely impacted home prices between 2% and 4%. However, he noted that prices proved resilient in much of the country, with national aggregate home price expected to increase 1% year-over-year to around $823,000 in the fourth quarter of 2026.
Regional Variations in the Housing Market
The housing market in different regions of Canada is expected to perform differently in 2026. According to the Royal LePage 2026 Market Survey Forecast, aggregate home price in the greater regions of Toronto and Vancouver is expected to decrease 4.5% and 3.5% year-over-year, respectively. In contrast, other regions are expected to see modest gains. Soper noted that low demand paired with healthier supply led to modest price spillage in Toronto and Vancouver, while other regions saw stable or small gains in prices.
The Condo Sector and Population Changes
Population changes, particularly the decline in immigration levels, had a significant impact on the condo sector, according to Soper. The decline in temporary foreign workers and international students hit urban condo markets the hardest. Soper explained that individual investors supply a lot of rental stock in big cities, but when interest rates peaked, the math for small investors in rental stock condominiums did not work. While lower rates in 2024 and 2025 were expected to bring them back, the rebound never fully materialized. As a result, condominium prices are expected to decrease 2.5% to $563,918 year-over-year in the fourth quarter of 2026.
Looking Ahead to 2026
Looking ahead to 2026, Soper said that the trend reflects a longer-term "compression" that began after the pandemic housing boom, with more affordable cities steadily rising while Canada’s most expensive markets cooled. He noted that the huge gap that has opened up over the last decade is starting to normalize somewhat. Soper also said that price changes remain below the long-term annual average of 5% and sales-to-listing ratios suggest neither buyers nor sellers have a decisive advantage. This proves a "more supportive" environment for younger families who are first-time buyers.
Government Involvement and the Future of the Housing Market
Government involvement will be a key factor in shaping what comes next in the housing market, according to Soper. He said that progress will depend on coordination across municipal, provincial, and federal levels, with policies translating into real construction and increased supply. Soper noted that all levels of government in most regions of the country are saying the right things, but the proof will be in execution. He emphasized the importance of government coordination in addressing the housing market challenges and providing a supportive environment for buyers and sellers.