CPA Canada warning adds new doubt to expectations of a clean 2026 rebound
Canada’s housing market appeared headed for a textbook recovery in 2026 – until the population stopped growing.
CPA Canada’s chief economist David‑Alexandre Brassard warned that a rare demographic reversal could upend long‑held assumptions about how demand, prices and construction behaved in the years ahead.
Instead of the familiar story of immigration‑fuelled growth straining limited supply, policymakers and lenders now face a market adjusting to softer demographics and stalled price momentum.
National home values slipped back to roughly 2021 levels after peaking in early 2022, with prolonged stagnation already weighing on resale activity in Ontario and British Columbia.
“From a housing perspective, this is new ground for Canada,” Brassard said. “We have never had a sustained period where housing demand wasn’t supported by population growth. That changes the baseline assumptions for sales, prices and construction.”
Population slide and weaker demand
Statistics Canada reported that the country’s population fell by 76,068 people in the third quarter of 2025, a 0.2% decline that left Canada at 41.6 million residents.
“Historically, Canadian housing demand has always been underpinned by population growth, whether through natural increase or immigration,” Brassard said. “Lower interest rates will still play their role, but in an expensive market, sales and construction would react more to price growth than lower rates.”
CREA forecast met new uncertainty
The Canadian Real Estate Association’s October forecast has called for national home sales to rebound by 7.7% in 2026, to 509,479 transactions, with the national average price rising 3.2% to $698,622. That outlook already presumed buyers would return gradually after a choppy 2024–25; the unexpected population downswing added a fresh source of risk.
The population slide landed squarely in the middle of the mortgage and housing story, amplifying questions about long‑term demand as housing starts in many Ontario municipalities fell more than 30% from recent norms. Other forecasts point to population growth possible slowing to near zero in 2026, with Canada Mortgage and Housing Corporation (CMHC) warning that lower immigration introduces significant uncertainty for both ownership and rental demand.
Regional and sector pressures
Prairies, Maritimes and Quebec see earlier price gains cool even as Ontario and BC contend with longer‑lasting stagnation. Construction activity has already weakened in markets facing flat or falling prices and could soften further if those patterns spread.
“The year ahead is likely to bring softer demand and will test how homeowners, buyers and builders respond to a new pricing reality,” he said.
“Affordability could improve, but it comes with slower turnover, weaker construction and pressure on household real estate wealth.”
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