Modest Recovery Forecast for Canada's Housing Market in 2026
A new economic report from TD Economics suggests that Canada's housing market is poised for a modest recovery in 2026, driven by pent-up demand and improvements in key provincial markets. The Provincial Housing Market Outlook, released in late January, indicates that national trends will show a positive shift after a challenging 2025.
National Outlook Shows Improvement
Nationally, the report forecasts a four per cent increase in home prices for 2026, a significant turnaround from the one per cent decline experienced in 2025. Sales activity is also expected to rebound, with a projected nine per cent rise compared to last year's nearly two per cent drop. This suggests a gradual stabilization in the market as economic conditions improve.
Provincial Highlights: Ontario and British Columbia Lead
Ontario and British Columbia are anticipated to be key drivers of this recovery. In Ontario, sales are forecast to surge by 13 per cent in 2026, following a four per cent decline in 2025. Prices in the province are expected to see a slight increase of less than one per cent, marking an improvement over the 3.5 per cent drop recorded last year.
British Columbia is projected to experience even stronger sales growth, with a 15 per cent increase after a nearly six per cent fall in 2025. Prices in B.C. are forecast to rise by nearly four per cent, recovering from an almost three per cent decline in the previous year.
Alberta's Housing Market Rebounds
Alberta is also set for a notable recovery, with sales expected to increase by nearly six per cent in 2026, compared to a drop of close to eight per cent in 2025. Home prices in the province are predicted to gain about four per cent, slightly higher than the just under four per cent growth seen last year. This indicates a resilient market in Alberta, contributing to the national uptick.
Regional Variations and Slower Growth Areas
While most provinces show positive trends, some regions may see more modest growth. For instance, Newfoundland, which had the largest percentage gain in sales in 2025 at nearly eight per cent, is expected to experience the least growth in 2026, with an increase of less than two per cent. Price growth in Newfoundland is also forecast to be lower, though still positive at about four per cent, compared to more than eight per cent in 2025.
Overall, the TD Economics report highlights a cautiously optimistic outlook for Canada's housing market in 2026, with improvements in sales and prices across multiple provinces signaling a gradual recovery from previous declines.
