Canadian Housing Market Forecast: Buyer-Friendly Conditions to Persist Through Spring 2026
As the Canadian real estate market navigates a period of adjustment, industry experts are predicting continued favorable conditions for buyers well into the new year. According to the latest Royal LePage House Price Survey and Market Forecast, the market is poised to remain buyer-friendly through early 2026 and into the spring season.
Market Trends and Price Movements
The national aggregate price of a home experienced a modest decline, falling 1.5 percent year over year to $807,200 in the fourth quarter of 2025. On a quarter-over-quarter basis, the aggregate home price dropped a comparative 1.1 percent, signaling a period of price stabilization rather than dramatic shifts.
Royal LePage broker and leader of Team Zold, Shawn Zigelstein, notes that "the market is expected to remain buyer friendly in early 2026 and into the spring, supported by rising inventory levels and continued price softness." This combination of factors creates what industry professionals describe as a genuine window of opportunity for prospective homebuyers.
Regional Variations and Major Market Insights
The report reveals significant regional disparities, with the most pronounced price declines occurring in Canada's most expensive metropolitan markets:
- Toronto experienced a 5.7 percent year-over-year decline in aggregate home prices during the fourth quarter
- Vancouver saw a 4.1 percent decrease in the same period
Within the Greater Toronto Area (GTA), specific market segments showed varying degrees of adjustment:
- The median price of a single-family detached home decreased 4.4 percent year over year to $1.364 million
- Condominium prices fell more significantly, dropping 8.2 percent to $656,000 in the same period
In the City of Toronto proper, the declines were even more substantial, with single-family detached homes decreasing 9.8 percent to $1.464 million and condominiums falling 6.5 percent to $637,000.
Factors Driving the Buyer-Friendly Environment
Several key elements are contributing to the current market dynamics, according to Royal LePage president and CEO Phil Soper. Buyers entering the spring market enjoy a meaningful advantage over previous years, characterized by:
- Lower borrowing costs following interest rate adjustments
- Stable or reduced property prices across many markets
- Increased inventory providing more choice for prospective buyers
Soper emphasizes that "together, these conditions are creating a genuine window of opportunity, particularly for first-time buyers in Canada's most expensive markets."
Market Outlook and Future Projections
While the spring market typically brings renewed activity, Royal LePage anticipates a more measured approach this year. The organization expects a renewed sense of momentum without the sharp surge in activity that often characterizes spring real estate seasons.
Continued consumer caution and a lingering lack of urgency are likely to temper both sales activity and price growth, maintaining more balanced market conditions. Zigelstein explains that "as interest rates settle near their floor and confidence begins to improve, market activity should gradually increase, helping to move conditions toward a more balanced state."
The forecast suggests that prices are expected to stabilize rather than soar, as increased supply levels will continue to moderate price appreciation even as demand slowly returns. Royal LePage projects the aggregate price of a home in the GTA will decrease 4.5 percent in the fourth quarter of 2026 compared to the same period last year.
Broader Economic Implications
The softening prices in major urban centers like Toronto and Vancouver may have wider economic consequences. Soper notes that "as affordability improves in southern Ontario and British Columbia's Lower Mainland, households are less likely to feel pressured to relocate purely on housing costs, potentially tempering the interprovincial migration patterns that intensified during the pandemic."
This stabilization in housing costs could contribute to more predictable population movements and potentially ease some of the demographic pressures that emerged during the pandemic years.
Interest Rate Expectations and Monetary Policy
Following four interest rate cuts in 2025, Royal LePage anticipates that the Bank of Canada will maintain current rates for the foreseeable future. This monetary policy stability is expected to provide additional certainty for both buyers and sellers navigating the spring market.
The combination of stable interest rates, increased inventory, and moderated price expectations creates what industry analysts describe as an unusually favorable environment for buyers who have been waiting on the sidelines during periods of market volatility.
