IG Wealth’s 2026 outlook points to policy tailwinds propping up housing and mortgage demand
Canadian mortgage professionals entered 2026 weighing a rare combination: cooling inflation, easier monetary policy and an equity-driven wealth effect that could keep housing demand surprisingly firm, even after a bruising rate cycle.
In its 2026 Market Outlook, IG Wealth Management argued that Canada and the United States have moved beyond the “rolling recessionary environment of 2023” and the tariff shock of early 2025, with recession risk “remain[ing] low into 2026” as financial conditions improved.
For housing and mortgage markets already recalibrating to lower rates, that backdrop suggests a cycle that still has room to run.
Philip Petursson, chief investment strategist at IG Wealth Management, said investors who stayed invested through tariff-driven volatility in 2025 “should feel confident about the durability of the current market cycle.”
“Investors can expect the global economy to continue on a positive trajectory in 2026 as we move past the rolling recessionary environment of 2023 and tariff uncertainty over the last year,” he said.
Lower rates, steady policy and a cautious buyer
IG’s team expects rate cuts to continue across major central banks, including at least one more move by the Bank of Canada, with policy “shift[ing] away from restrictive policies to easing” and supporting “corporate investment, the housing market and consumer spending.”
That view aligns with BoC’s final 2025 decision, which saw the policy rate end the year at 2.25%, “a full percentage point lower than where it began 2025.”
Governor Tiff Macklem’s hold decision still “signal[led] a brightening outlook for variable-rate mortgage holders,” even as fixed terms remain the dominant choice for borrowers.
AI, wealth effect and the next leg for housing
Beyond rates, IG leans heavily on two structural supports: an AI‑driven capital spending boom and a renewed wealth effect from rising equity markets.
The firm said the investment cycle in AI infrastructure has “the potential to extend the current constructive economic cycle and support broader economic growth.”
On the household side, IG pointed to the post‑2009 pattern in which “when equity markets rise, so do household wealth and consumer spending, creating a so‑called ‘wealth effect’,” a dynamic it expected to “be repeated in households across Canada and the U.S.”
“If 2025 was a year of uncertainty, 2026 will bring clarity—not through the absence of noise, but through the strength of fundamentals,” Petursson said.
For mortgage professionals, the message is less about calling the bottom and more about recognizing a policy and earnings backdrop that still favour borrowers with stable income, sensible leverage and a long view of the housing cycle.
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