Canada's housing market is healing - but far too slowly to feel it

Canada's housing market has passed its cyclical low, but the recovery unfolding in the second half of 2026 remains fragile and geographically uneven.

A mid-year outlook by Robert Hogue, assistant chief economist at Royal Bank of Canada (RBC) Economics, projects national home resales to fall 3.6% to 453,200 units this year and the benchmark price index to slip 2.3% to $794,200.

The more promising window arrives in 2027, when RBC forecasts transactions rising 6.7% to 483,600 units and benchmark values edging 0.8% higher to $800,700.

Resales have risen in each month since April, inventory has levelled off, and the pace of price declines is moderating in Canada's most expensive markets.

Hogue nonetheless cautions that "the path is unlikely to be smooth or uniform across the country," with the extended downturns in Ontario and British Columbia still weighing on buyer confidence.

Pent-up demand and a labour market in transition

RBC estimates that the creation of more than 400,000 households may have been suppressed since 2019 as ownership costs surged, with many Canadians renting longer than intended or deferring purchases entirely.

Savings among 25- to 34-year-olds are near a 25-year high, positioning that cohort to act once conditions stabilise.

For brokers tracking that potential wave, RBC's July 2026 breakdown of Canada's uneven regional housing trends offers useful context on where that demand is beginning to surface.

Hogue writes that "an improving job market will do wonders for confidence," with GDP growth expected to persist through end-2027 and labour market slack absorbed by next spring. The Bank of Canada, however, is forecast to hold its policy rate through the rest of 2026 before raising it in 2027.

While Canada's national housing affordability has reached its best level in four years, Hogue's mid-year report makes clear that further rate-driven relief is largely exhausted.

On the ground, brokers have flagged the difficulty of reading conditions in real time. Elan Weintraub, co-founder and director at Mortgage Outlet in Toronto, told Canadian Mortgage Professional in June that real estate remains "extremely micro-fragmented," with conditions differing sharply by geography, price point, and property type.

Regional divergence: Ontario, B.C. and the Alberta exception

The national numbers conceal stark provincial contrasts. Ontario resales are forecast to dip just 0.5% in 2026 before rising 8.2% in 2027; British Columbia faces a steeper 4.6% decline this year ahead of a 7.8% rebound.

Brendan Ogmundson, chief economist at the British Columbia Real Estate Association (BCREA) in Vancouver, said earlier this year that "households will likely need a prolonged period of stability to re-enter the market," a view consistent with Hogue's cautious provincial outlook.

Condo markets in Greater Toronto and Metro Vancouver are an exception to any broader recovery story, with abundant inventory and weak investor demand expected to keep prices declining, possibly into 2028.

Alberta is the clearest outlier at the other end of the spectrum, with RBC projecting transactions to rise 7.1% and the RPS Home Price Index to gain 1.8% in 2027, backed by a comparatively resilient labour market.

Hogue has counted four false starts in Canada's housing recovery since 2023, and identifies US tariff escalation, geopolitical disruption, and tighter-than-expected immigration cuts as the three likeliest sources of a fifth.

Source: Canadian Mortgage Professional