Forecasts pointed to a fragile, region‑split recovery as construction slowed and demand reshaped
Canada’s housing outlook for 2026 points to a market that is still fragile, with modest national gains masking sharp regional splits in sales and prices.
Canada Mortgage and Housing Corporation (CMHC) projected real GDP growth of just 0.7% in 2026, one of the weakest non‑recession years in recent decades, as trade tensions, slower population growth and softer labour markets weigh on demand.
The agency’s new Housing Market Outlook showed housing demand gradually recovering after a 2025 slowdown, yet remaining below historical norms. Nationally, CMHC’s baseline forecast called for 489,000 MLS sales in 2026, up from 470,000 in 2025, and an average price of $698,000 compared with $680,000 a year earlier.
Housing starts are expected to fall to 247,000 in 2026 from 259,000 in 2025 as developers contend with higher costs, weaker presales and more unsold units.
Builders, meanwhile, continue to pull back from new projects. CMHC projected that condominium starts would be “especially weak,” particularly in Toronto, where pre‑construction sales have fallen to multi‑decade lows.
In a recent update, CMHC deputy chief economist Tania Bourassa‑Ochoa said that through mid‑2025 “actual housing starts have remained above 2024 levels, primarily driven by increased multi‑unit starts in the Prairie provinces and Quebec,” underscoring how regional supply trends are already diverging before the forecast period.
Ontario slides while Prairies, B.C. and Atlantic hold up
Ontario stood out as “the only region expected to see price declines in 2026,” CMHC said, with high inventories and muted sales in the most expensive urban centres.
By contrast, CMHC expects British Columbia’s prices to grow in 2026, partly because “many newly completed higher-priced condominiums” would lift average prices, even if there is “a chance of a slight pullback as those effects fade.”
The Prairies and Eastern Canada, which saw strong gains in 2025, are projected to keep rising but at a slower pace.
Quebec cools but stays resilient
In Quebec, CMHC said “residential construction and sales will remain strong, but price and rent growth will slow in 2026.”
Slower population growth, driven by “the federal government’s cap on international student admissions” and “Quebec’s reduced immigration targets,” is expected to be “the main factor moderating the increase in housing demand.”
Montréal’s market, particularly rentals, is likely to soften as net non-permanent resident inflows reverse, while the Québec City area is set to “stand out with higher price growth” because of scarce listings and one of the lowest unemployment rates in the country.
Starts in Montréal, Québec City and Gatineau are projected to “stabilize at high levels,” supported by earlier approvals, lower rates than recent peaks and government supply programs, even as vacancy rates in major rental markets are expected to reach “between 2.5% and 4.5%” in 2026.
CMHC added that “very few condominiums will be built in 2026,” underscoring how the province’s boom has tilted toward rentals.
Halifax shifts to slower, steadier growth
Halifax’s market is moving “from rapid, population‑driven price growth to a more balanced pace.” CMHC said housing starts and prices are “expected to remain stable during the forecast period, supported by a strong labour market,” even as migration cools and labour constraints temper momentum.
After record apartment construction, “housing starts in Halifax are expected to stabilize in 2026,” with purpose-built rental starts easing slightly as earlier projects improve supply.
Prices and sales in Halifax are projected to “rise slightly in 2026” and then stabilize as “most new homes remain unaffordable for first-time buyers.”
On the rental side, vacancy rates are expected to rise modestly yet “stay below the long-term average,” leaving the market tight. CMHC said rent caps and affordability pressures would keep turnover low, and warned that rent controls “may also reduce the overall rental stock, as some units are removed from the market and converted to other uses, mostly condos.
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