Canada’s housing market has continued its sluggish trajectory through 2024 and into 2025, with formerly high-pressure regions like Toronto experiencing an unmistakable slowdown. A combination of recessionary pressures, elevated post-pandemic interest rates, and a surge in listings from homeowners looking to exit the market has pushed sales activity downward and placed sustained pressure on prices.
Looking ahead, many Canadians are wondering whether the market will stabilize or if further declines are on the horizon. While developers and existing homeowners are hoping for signs of recovery, first-time buyers are watching closely as continued price corrections could open a rare window of affordability not seen in years.
Market forecasts for 2026 suggest that, on average, home values across the country may slide a bit further, though sales activity is expected to improve modestly after a notably slow 2025. Analysts anticipate that next year could bring a more balanced environment overall—still buyer-friendly, but with slightly more movement than the past 18 months have delivered.
Ontario tells a more varied story. Toronto is projected to see another small price dip in 2026—expected to bring the average home to just over the $1-million mark—accompanied by a modest rebound in sales. Several other Ontario regions may also see slight price decreases, including Kitchener-Waterloo and Kenora, though most markets in the province are forecast to experience flat or slightly rising values. Notably, more affordable communities in Northern Ontario remain the most budget-friendly options for buyers, with average prices well below those found in the GTA.
Despite the broader economic uncertainty, consumer sentiment is shifting. Recent surveys indicate that a growing number of Canadians—about one in ten—are considering entering the housing market within the next year. At the same time, more than half believe the national economy may continue to soften. For buyers and homeowners alike, this combination of cautious optimism and economic concern makes professional guidance more valuable than ever. A mortgage expert can help navigate rate trends, assess timing, and find opportunities in a market still very much in transition.
Want further insight on the Canadian Real Estate Market? Answers to all your questions are a call or email away