Modest price gains and easing borrowing costs expected to lure sidelined buyers back into the market
After a rocky year shaped by shifting economic signals and political turbulence, Canada’s housing market could finally be turning a corner in 2026.
A new Royal LePage forecast suggests the country is in for a restrained but steady recovery, with affordability gradually improving and more Canadians prepared to re-enter the market. The firm age projects the national aggregate home price will edge up just 1% year over year to $823,016 by the end of 2026.
For detached homes, the report suggests a 2% lift in the nationwide aggregate price to $876,934, but condo prices could slip 2.5% to $563,918.
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“Solid market fundamentals – including lower interest rates, increased supply, and reduced competition – have created a more favourable environment for consumers,” says Phil Soper, president and CEO of Royal LePage, adding that buyers in high-priced regions have a “rare window to act on their home ownership plans at reduced prices,” though any bounce back in values will likely be small.
However, Toronto and Vancouver are expected to move in the opposite direction with Royal LePage predicting home values in the GTA will fall 4.5% in 2026, while Greater Vancouver prices are expected to decline 3.5%.
Montreal is set for a 5% increase and Quebec City is once again projected to lead all major regions with a striking 12% jump in overall prices. Regina is also poised for a 4% rise amid persistent supply tightness. Meanwhile, Calgary, Edmonton, Halifax, Winnipeg and Ottawa aren’t expected to see more than 2% growth.
Soper says the second half of 2025 showed encouraging signs that consumer uncertainty is easing.
“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.”
With the Bank of Canada cutting rates four times in 2025, bringing its key rate to 2.25%, the central bank is now expected to tread carefully as the economy cools. Further reductions are predicted only if conditions worsen.
“Mortgage rates are no longer the villain in this story. Borrowing costs have stabilized at a level that supports healthy market activity,” Soper notes. “That clarity alone will unlock demand.”
Even so, Royal LePage survey data shows would-be first-time buyers are still cautious: 40% of renters who contemplated purchasing recently held off in hopes of lower home prices, and 29% were waiting for deeper rate cuts.
Despite early progress on boosting supply, the building boom is proving uneven and Soper warns that momentum cannot be allowed to stall.
“Increasing supply remains critical to achieving long-term affordability,” he said. Cities must focus on “missing-middle options like duplexes, triplexes and townhomes,” he added.
Key initiatives include Build Canada Homes, a new federal agency tasked with affordable development, starting with 4,000 factory-built homes across six public land sites.
Royal LePage expects buying activity to accelerate gradually throughout 2026, especially if global trade tensions ease and domestic conditions remain stable.
“Canada’s housing market is moving forward again,” Soper concludes. “Improved conditions are drawing buyers back, step by step. The reset is behind us – now we build.”
