Canada's spring housing market got off to a sluggish start, according to a new report from Royal LePage. Economic and geopolitical uncertainty, along with the lingering effects of a long and snowy winter, are being blamed for the slow beginning. However, activity has begun to pick up, the real estate firm reports.
Factors Behind the Slowdown
Phil Soper, President and CEO of Royal LePage, noted that in a typical spring, Canada's housing market would already be gaining momentum. However, persistently low consumer confidence remains a drag on activity, especially in the most expensive markets. Three key factors are contributing to the sluggish market: hesitant first-time buyers, a return to sell-before-buy behavior, and limited inventory in several key markets.
First-time buyers are described as the engine of the housing market, and when they pause, it affects every segment. Move-up buyers are also taking a more measured approach, often choosing to sell before committing to their next purchase, a behavior not seen in years. In some regions, the issue is not demand but supply.
Survey Shows Increased Intent to Move
A Bank of Canada survey from the fourth quarter of 2025 found that 29% of Canadians were likely to move within the next 12 months, up from 22% a year earlier. Similarly, 20% of homeowners said they were likely to sell their home within the next year, up from 14%.
Price Trends in the GTA
According to the Royal LePage House Price Survey and Market Forecast, the aggregate price of a home in the Greater Toronto Area (GTA) decreased 4.7% year over year to $1,091,900 in the first quarter of 2026. On a quarterly basis, however, the aggregate price increased a modest 0.7%.
Broken out by housing type, the median price of a single-family detached home decreased 4.5% year over year to $1,382,300, while the median price of a condominium decreased 6.5% to $658,000 during the same period.
Shawn Zigelstein, broker and leader of Team Zold at Royal LePage Signature Realty, noted that the spring market is quietly building momentum, with home sales in Toronto rising modestly year over year at the end of the first quarter. However, price growth remains flat from one month to the next as elevated supply levels keep conditions balanced. The condo segment has seen a slight uptick in activity, driven largely by interest from first-time buyers and downsizers. Inventory throughout the city has been trending downward, as many sellers choose to relist at a later date rather than accept lower offers. This signals a level of confidence among sellers but also contributes to a degree of gridlock, with buyers and sellers waiting for more favorable conditions to move forward.
Royal LePage is forecasting the aggregate price of a home in the GTA will decrease 4.5% in the fourth quarter of 2026, compared to the same quarter last year.
Impact of HST Rebate
The decision by the provincial and federal governments to eliminate the 13% HST on the purchase of new homes could influence how buyers compare new builds with resale properties in markets where both options are available, according to Victor Tran, a mortgage and real estate expert at Rates.ca.
The incentive could shift demand in regions where housing developments are actively being built. When buyers compare a newly built home with a resale property at a similar price point, the tax rebate can narrow that gap, potentially encouraging buyers to choose a new build. This could put some pressure on resale homes in areas where new inventory is coming into the market.
Mortgage rates have moved up in recent weeks, with fixed rates shifting from the high three percent range into the four percent range, which has a bigger impact on monthly affordability. When factoring in costs like insurance, property taxes, and maintenance, that increase still adds pressure. Tran advises prospective homebuyers to look at how the rebate changes the difference in cost between a new build and a resale home, not just the upfront savings. While it can make new builds more competitive at a similar price point, buyers still need to consider factors like deposit structure, upgrade costs, and the potential for longer closing timelines. Lenders also base financing on the appraised value of the property, not the purchase price, which can create a gap buyers need to cover. Comparing both options side by side helps buyers decide what fits their budget, timing, and long-term plans.
Role of Alternative Lenders
Bryan Jaskolka, CEO of CMI Financial, noted that spring in the GTA is historically when the market finds its rhythm, and 2026 will be no exception, though the backdrop is more complex than usual. Between global trade uncertainty and the ongoing mortgage renewal wave, there is a lot of noise. However, for buyers who are prepared and have the right financing in place, that noise can actually create opportunity. The key is not assuming that a traditional bank mortgage is the only path forward. A lot of qualified buyers are being turned down not because they cannot afford a home, but because they do not fit an increasingly rigid approval mold. That is exactly the gap private lending was built to fill.
