Market Memo: Quarterly Report – October 2026

  • First National Financial LP
For the third time this year Canada’s realtors have pulled back their housing market projections.  Hopes for a modest revival from a slow first-half of the year have faded as changing, but persistent, uncertainties keep potential home buyers out of the market.

Fewer sales.  Less price growth

In its latest Quarterly Report, the Canadian Real Estate Association says it now expects about 444,500 residential properties to trade hands by the end of this year.  That is a 4.0% decline from the 463,000 sales forecast at the end of the first half of 2026, and a 5.2% drop from 2025.

CREA has also trimmed its price forecast.  The association expects to see the average home price in Canada rise by 0.2%, to just shy of $682,000.  The last forecast, back in July, projected a modest 1.1% increase for 2026.  Price declines in British Columbia (-0.8%) and in Ontario (-3.0%) are expected to counter-balance better performance in other parts of the country.  But CREA acknowledges that price growth has slowed nationwide.

Changing but persistent uncertainty

CREA says 2026 has been another year of uncertainty for prospective home buyers.  The association points to on-again-off-again worries about inflation, triggered by unstable energy costs (i.e. the wars in Iran and Ukraine) and the effect that is having on interest rates.

“As of early September, oil prices were rising again amid a number of global capacity and refinery disruptions.  Combined with a notably more hawkish tone from the Bank of Canada, fixed mortgage rates have jumped even higher, and markets are now pricing in approximately 100 basis points of rate hikes by this time next year.

The recent shift in fixed-rate mortgage affordability, combined with continued uncertainty around variable rates, has already shown up in the form of lower home sales activity in September,” CREA wrote in its latest report.


Improvements in 2027

The outlook is more positive for next year.  CREA is looking forward to “slow but positive economic growth, the resumption of higher population growth, and more certainty for borrowers around the path for interest rates” in 2027.

Sales are forecast to climb 4.4% to just over 464,000 units.  Most provincial markets are expected to see gains between 3.0% and 6.0%.  The national average home price is forecast to climb 1.2% from 2026 to $690,000.

Better intentions.  More construction

A separate report from Statistics Canada shows intentions to build homes improved in August.  Residential building permits helped boost the total value of permits issued for the month.  Construction intentions in the residential sector rose to $8.5 billion, a $1.1 billion increase over July, led by permits for multi-unit buildings.

Canada Mortgage and Housing Corporation reports the annualized rate of actual housing construction rose 3.0% in September, compared to August.  The federal housing agency says that puts the country on track for almost 249,000 housing starts this year.

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