Melinda Baker

The Canadian Real Estate Association (CREA) has updated its 2026 forecast for home sales activity and average home prices via the Multiple Listing Service (MLS) Systems of Canadian real estate boards and associations and extended the outlook to include 2027. One year ago, expectations were that 2025 would mark a turning point, with buyers beginning to come off the sidelines after a significant slowdown across many Canadian housing markets. That slowdown coincided with the Bank of Canadas use of higher interest rates to fightand ultimately winits first battle with inflation since adopting its inflation-targeting mandate in 1992. While the economic uncertainty resulting from U.S. tariff threats ultimately resulted in another slow year for housing in 2025, most of that weakness was front loaded in the first months of the year. Beginning in April, the market underwent a rally that saw sales climb 12% by August. While this slowed into more of a holding pattern to finish the year, its that mid-year upward trend that is expected to pick up once again in 2026. A major factor underpinning this forecast for higher activity in 2026 is pent-up demand, particularly from first-time buyers, many of whom have been shut out of the market over the past four years. While interest rates have not fallen as far as many may have hoped for, they have likely fallen far enough to restore the attainability of homeownership for many, despite affordability that remains more challenging than it was prior to 2020. https://www.crea.ca/media-hub/news/crea-downgrades-resale-housing-market-forecast-amid-tariff-uncertainty-and-economic-uncertainty/

CANADA HOUSING MARKET: FOR 2025, THE EARLY-YEAR OPTIMISM WAS SIDETRACKED BY RISING GLOBAL TRADE FRICTIONS AND UNCERTAINTY National housing sales (in units) posted another monthly decline in December. The sales-to-new listings ratioan indicator of market conditions tightnesseased modestly over this period with new listings also declining, but at a lesser pace than sales. The national MLS HPI continued its downward trend in December, consistent with easier housing market conditions nationally. National (unit) sales fell -2.7% (sa figures) from November to December, after a -0.8% monthly decline in November. In December, they were -10.1% below their most recent peak achieved in November 2024, and 4.5% (nsa figures) below their December 2024 level. National new listings posted their fourth consecutive monthly decline in December with a -2% (sa) print. However, they were in December 0.8% higher than the same month in the previous year. National resale market conditions eased in December, from both the previous month and from the same month in 2024. The monthly easing reflects a 0.4 percentage point decline (sa) for the sales-to-new listings ratio from November to Decemberas the decline in sales modestly outpaced that in new listingsas well as a modest rise in months of inventory from 4.4 to 4.5 months over this period. Second, the yearly progression in both the sales-to-new listings ratiodeclining by 3.5 p.p.and months of inventoryrising by 0.6 monthsuggests easier resale conditions last December compared to a year earlier. https://www.scotiabank.com/ca/en/about/economics/economics-publications/post.other-publications.housing.housing-news-flash.january-15--2026.html