2026 Canadian Housing Market Forecast: Complete Analysis
Data-driven insights from CMHC, Bank of Canada, and CREA to help you navigate the Canadian real estate market in 2026.
Key Takeaways for 2026
Rates Stabilized at 2.25%
BoC held steady since Oct 2025, expected to remain at 2.25% through 2026
Modest Growth Expected
GDP forecast 1.1% for 2026, with gradual price stabilization
Condo Market Challenges
Toronto condo starts at lowest since 1996, investor pullback continues
Trade & CUSMA Uncertainty
CUSMA review deadline June 2026 creates business investment hesitancy
Bank of Canada Interest Rate Trajectory
As of March 2026, the Bank of Canada's policy rate sits at 2.25%—the culmination of an aggressive rate-cutting cycle that began in June 2024. The BoC has held rates steady since October 2025, signaling that the current level is "about right" to support economic adjustment while keeping inflation near the 2% target.
Complete Rate Timeline (2024-2026)
According to Nesto and major banks, the BoC is expected to hold rates at 2.25% through most of 2026. TD Economics projects no changes until at least 2031, while Scotiabank forecasts a potential increase to 2.75% by year-end 2026 if economic conditions strengthen. The next rate announcement is scheduled for March 18, 2026.
National Housing Outlook from CMHC
The Canada Mortgage and Housing Corporation (CMHC) forecasts a period of "cautious recovery" for the Canadian housing market in 2025, with significant regional variations.
Positive Factors
- ✓Lower mortgage rates releasing pent-up demand
- ✓New CMHC rules increasing insured mortgage limit to $1.5M
- ✓Millennial buyers entering peak home-buying years
- ✓CREA forecasts 4.4% price growth nationally
Risk Factors
- ✗Potential 25% US tariffs on Canadian exports
- ✗Reduced immigration targets 2025-2027
- ✗Unemployment projected to rise until mid-2025
- ✗Ontario/BC facing slower price recovery
CMHC's Summer 2025 Update predicts Canadian average home prices may decline about 2% in 2025, with larger drops expected in Ontario and British Columbia due to ongoing affordability challenges and reduced immigration.
Toronto & GTA Market Analysis
According to the Toronto Regional Real Estate Board (TRREB) , 2024 was a "transitionary year" for the GTA housing market. Here's the December 2024 data:
GTA December 2024 Statistics
Average Selling Price
$1,067,186
-1.6% vs December 2023
Total Sales
3,359
-1.8% vs December 2023
New Listings
4,681
+20.2% vs December 2023
Average Condo Price
$703,217
-1% vs December 2023
Price Breakdown by Property Type
| Property Type | Avg Price | YoY Change |
|---|---|---|
| Detached (416) | $1,524,066 | -10.0% |
| Detached (GTA-wide) | $1,310,000 | -7.2% |
| Semi-Detached | $980,102 | -4.5% |
| Townhouse | $946,395 | -4.5% |
| Condo Apartment | $703,217 | -1.0% |
Toronto Condo Market Warning
According to CMHC analysis, Toronto's condo market is experiencing declining sales, rising inventories, and project cancellations. Condo starts have dropped to their lowest level since 1996. While a softer correction is expected compared to the 1990s (due to stricter lending standards), investors face significant challenges.
GTA Regional Price Analysis
York Region
Durham Region
Source: MoneySense GTA Affordability Analysis (January 2024 benchmark prices). Durham Region continues to offer the most affordable entry into the GTA market.
Income Required to Buy in 2025
According to Nesto's affordability calculator , here's what you need to earn to buy in the GTA (assuming 20% down payment):
Income Requirements by Property Type
Detached Home (GTA)
$1,360,400 benchmark
$269,000
annual income
Townhouse (GTA)
$795,000 benchmark
$157,000
annual income
Condo Apartment (GTA)
$682,600 benchmark
$137,000
annual income
The Affordability Gap
The median household income in Toronto is approximately $98,000, while the average is around $129,000. Both figures fall significantly short of the $137,000-$269,000 required to purchase a home in the GTA, creating one of Canada's largest affordability gaps.
Expert Predictions for 2026
Economic Growth Outlook
The Bank of Canada projects GDP growth of 1.1% in 2026 and 1.5% in 2027—modest growth influenced by slow population growth and US trade policy uncertainty. The economy rebounded in Q3 2025 but stalled towards year-end.
Source: Bank of Canada MPR
Interest Rate Forecasts
Major bank forecasts for 2026 vary: TD Economics expects rates to hold at 2.25% through 2026-2031. Scotiabank forecasts a rise to 2.75% by year-end 2026. CIBC projects steady 2.25% throughout 2026. The CUSMA review deadline in June 2026 is a key uncertainty factor.
Inflation & Labor Market
CPI inflation was 2.3% in January 2026, close to the 2% target. The unemployment rate dipped to 6.5%, with a "low-hire, low-fire" dynamic keeping the labor market stable. The BoC expects inflation to remain near target, with economic slack offsetting tariff-related cost pressures.
Rental Market
Purpose-built rental vacancy rates in the GTA increased to 3%—the first time since the pandemic. According to CMHC's Rental Market Report, this easing is driven by declining international migration and increased condo rental competition.
What This Means for You
For Buyers
- 1.Rates at 2.25% are stable—lock in now before potential increases later in 2026
- 2.Consider Durham Region for better affordability (Oshawa avg $793,600)
- 3.Be cautious with pre-construction condos—investor pullback continues
- 4.Watch the CUSMA review deadline (June 2026) for potential market impacts
For Sellers
- 1.Price competitively—elevated inventory means more competition
- 2.Stage your home (75% of sellers see 5-15% ROI from staging)
- 3.Consider soft-listing to test the market before committing to a realtor
- 4.Spring 2026 offers stable rates—good time to list freehold properties
Data Sources
- • Bank of Canada: Key Interest Rate Announcements
- • Bank of Canada: 2026 Rate Schedule
- • CMHC: Housing Market Outlook
- • TRREB: Toronto Regional Real Estate Board Market Stats
- • Nesto: Canadian Mortgage Rate Forecast 2026
- • CBC News: Bank of Canada Rate Analysis
- • MoneySense: GTA Affordability Analysis
Last updated: March 5, 2026