Following a slow start to the spring selling season, Canada’s residential resale market has begun to find its footing. However, the anticipated recovery hasn’t been strong enough for the Canadian Real Estate Association (CREA) to maintain its original housing market forecast for 2026.
Economic developments and housing trends during the first half of the year have prompted CREA to downgrade its projection. The association now expects 463,336 residential properties to trade hands through Canadian MLS systems, nearly 32,000 fewer than previously predicted. While this would represent a modest 1.4 per cent decline from 2025, CREA had forecast a 5.1 per cent year-over-year increase in sales.
The revision reflects a more pronounced-than-anticipated slowdown in parts of the country facing the dual headwinds of the sharp reduction in population growth and historic supply shortages, particularly in Quebec and Atlantic Canada. As a result, Ontario is now the only province projected to record higher home sales in 2026 than in 2025.
The national average home price is still forecast to rise in 2026, but only by 1.1 per cent annually to $686,710, compared with the previously predicted 2.8 per cent increase. The updated outlook reflects declines of less than one per cent in British Columbia and Ontario, offset by continued but slowing price growth in other provinces. Standout provinces on the price front include Alberta, where prices turned a corner and resumed rising in the second quarter, and Newfoundland and Labrador, which remains Canada’s only province firmly in seller’s market territory.
Uncertainty Extends Beyond Borders
Housing market momentum was tempered in spring by the lingering effects of a long, snowy winter and geopolitical uncertainty. Ongoing trade tensions with the United States continued to fuel concerns about economic stability and job security, while the inflationary impact of America’s escalating conflict with Iran pushed energy prices and fixed mortgage rates higher in late March. Rates have since partially eased, and the prospect of further Bank of Canada interest rate hikes this year has largely been taken off the table, providing some relief for both fixed- and variable-rate borrowers.
This slowdown affected not only sales but also the national aggregate home price, which declined two per cent year-over-year in the first quarter and 1.4 per cent in the second quarter. However, on a quarter-over-quarter basis, prices held steady, edging up a modest 0.2 per cent.
National figures, though, do not tell the whole story. Housing trends continue to be heavily influenced by weaker conditions in British Columbia and southern Ontario because of the size of those markets. In contrast, Quebec’s comparatively affordable housing market supported stronger sales activity and price growth. While home sales eased across the Prairies, limited inventory continued to support modest price gains. In Atlantic Canada, stronger economic conditions, driven by growth in Newfoundland and Labrador’s energy sector and a rebound in Nova Scotia’s exports, helped sustain housing demand. Although sales activity moderated, tight supply and ongoing interprovincial migration in search of more affordable housing helped underpin modest home price appreciation.
Major Cities Follow Diverging Paths
While most regional markets showed resilience, conditions remained more varied in Canada’s largest urban centres.
In the Greater Toronto Area (GTA), market conditions tightened as activity improved steadily from one month to the next while new supply declined. Many sellers chose to delay listing their homes for sale rather than accept lower offers, contributing to a gradual increase in prices. While the region was still characterized as a buyer’s market, momentum shifted toward more balanced conditions in the second quarter.
Activity is expected to continue increasing, with the exception of the condominium sector, which is likely to stay soft given elevated inventory and selling pressure from investors. If supply declines and pent-up demand remains significant — particularly among move-up buyers who have delayed purchasing decisions over the past two years — competition could intensify this fall.
In Ottawa, home prices inched up slightly despite lower sales activity compared with the same period last year. Inventory held steady at balanced levels, suggesting the recent slowdown has been driven more by softer buyer demand than by supply constraints. Summer market activity is expected to be fairly typical, with the potential for a busier fall if consumer confidence improves.
Activity was strong on Montreal’s North and South shores, where limited inventory favoured sellers. Downtown, however, is still feeling the effects of the pandemic-driven shift away from urban living. The luxury property market was the main source of renewed activity in the city, supported by a clear return of consumer confidence and liquidity in Westmount, Outremont and Mont-Royal. Despite a gradual increase in housing stock, demand remained strong, with buyers outnumbering available listings and maintaining upward pressure on prices. By contrast, the condo market continued to face significant challenges, including a historic glut of units.
The market eased considerably in Quebec City, with far fewer multiple offers than before, although buyers were present and active. Prices reflected the slowdown, but limited available supply still put slight upward pressure on property values.
The outlook for the second half of the year in Montreal and Quebec City remains cautious. The upcoming provincial election could cause some buyers and sellers to pause, while also raising the possibility of a minority government and increased support for the Parti Québécois. This could renew long-standing federalist-sovereigntist tensions and create uncertainty for the business climate, particularly within the English-speaking community.
While still below typical seasonal trends, Greater Vancouver saw sales activity steadily tick upward month-over-month. June marked a significant improvement in home sales, increasing about 10 per cent from a year ago. Sales are expected to flatten out over the summer months before picking back up again in the fall.
Activity gradually picked up in Calgary, though sales were down roughly 11 per cent compared with the same period last year. Despite lower sales, conditions remained fairly balanced overall. The city’s relative affordability continued to attract buyers from other provinces, supporting sustained interprovincial demand.
In Edmonton, first-time buyers and newcomers maintained a strong presence, many drawn to the city for employment opportunities and its relative affordability. Move-up buyers also became more engaged, particularly those who purchased during the pandemic and are seeking more space. Edmonton’s luxury market continued to gain momentum, as homeowners in established neighbourhoods have invested significantly in renovations and upgrades, enhancing property values and raising expectations for surrounding areas. Market activity is expected to ease gradually through the summer rather than experience a sharp decline, with momentum carrying into the early weeks of the third quarter.
Regina performed slightly better than expected, with buyer demand remaining resilient despite ongoing affordability challenges. Inventory stayed below long-term historical averages, as new listings were generally absorbed quickly. Continued population growth and in-migration to Regina and other parts of Saskatchewan also supported housing demand.
Winnipeg’s market unfolded largely as expected. Sales softened modestly compared with the same period last year, while new listings increased more meaningfully, giving buyers greater choice. Despite lower sales volumes, home prices posted modest year-over-year gains, supported by limited inventory.
A sense of hesitation emerged in Halifax. Consumers were engaged but a lack of urgency kept inventory levels elevated. The market continued to be driven largely by local first-time buyer demand. Out-of-province buyers pulled back as return-to-office mandates reduced the flexibility that previously made relocation more viable. Some of that demand is expected to return as increased federal defence spending brings military personnel and their families to bases across the region.