Latest outlook shows a slower recovery ahead for Canada's resale housing market
The Canadian Real Estate Association (CREA) has revised its projections for the Canadian resale housing market, signaling a more cautious recovery than previously anticipated.
After a turbulent start to 2025, CREA now expects national home sales to fall 1.1% from 2024 levels, with 473,093 properties forecast to change hands via MLS Systems.
With fewer homes expected to change hands, mortgage originations will likely remain below recent averages. This could intensify competition among lenders, as they vie for a smaller pool of qualified borrowers.
Regional disparities and lender competition
The national average home price is also set to dip by 1.4% to $676,705 in 2025, largely due to declines in British Columbia and Ontario.
“Tariff chaos and economic uncertainty returned many home buyers back to the sidelines,” CREA said in its update, noting that the impact was especially pronounced in British Columbia and Ontario, where both sales and prices took a hit.
“That said, since March 2025, home sales activity has been on a steady upward climb, suggesting the long-anticipated return of buyers into the market was likely only delayed and dampened, but not derailed.”
While the 2025 forecast is lower than what CREA had projected a year ago, the association pointed to “solid upward momentum heading into 2026.”
Outlook for 2026 and market fundamentals
CREA now expects 509,479 sales in 2026, or a 7.7% rebound and the highest level since 2021, though still below the market’s pandemic-era peak.
The national average home price is forecast to rise by 3.2% to $698,622 in 2026, marking the sixth consecutive year the average has hovered near the $700,000 mark.
Regional disparities remain a defining feature of the market. While British Columbia and Ontario are forecast to see price declines in 2025, most other provinces are expected to post gains between 4% and 8%.
Lenders with significant exposure to BC and Ontario may see increased portfolio risk and slower growth, while those active in provinces expecting price gains could find new opportunities.
CREA attributed the national dip to the outsized influence of these two high-priced provinces, which offset growth elsewhere.
The association cautioned that “all forecasts are still subject to higher than normal levels of uncertainty,” though the outlook has stabilized somewhat compared to earlier in the year. CREA’s next quarterly update is scheduled for January 15, 2026.
CREA’s revised outlook comes amid ongoing volatility in Canada’s housing sector, shaped by fluctuating interest rates, affordability concerns, and shifting buyer sentiment.
According to the latest Canada Housing Quarterly Chartbook from Oxford Economics, Canadian home prices are set for a brief dip before stabilizing and recovering modestly.
Adjusted for inflation, real house prices are expected to remain essentially flat through 2030. Market fundamentals, especially chronic undersupply, are expected to provide a floor for prices, even as new supply gradually comes online.
Moreover, plenty of homebuyers "are not feeling a sense of urgency because there’s so much opportunity,” Royal LePage’s Anne-Elise Cugliari Allegritti, vice president of research and communications, said.
"[Buyers are] getting ready – but they’re not necessarily jumping in out of a sense of urgency,” Cugliari Allegritti said. “At the same time, even though our economy has been fairly resilient to trade relations and everything that’s happening between Canada and the US right now, there’s still a sense of uncertainty in the air," she added.
Make sure to get all the latest news to your inbox on Canada’s mortgage and housing markets by signing up for our free daily newsletter here.
