What to know
- CREA has revised its 2026 home sales forecast for the third time this year.
- National home resales are now expected to fall 5.2 per cent in 2026, to 444,530 properties.
- Ontario home sales are forecast to decline by three per cent this year before increasing by 5.3 per cent in 2027.
- Average Canadian home prices are expected to rise slightly by the end of 2026, while Ontario prices are forecast to drop three per cent.
- CREA cites economic uncertainty and mortgage rate concerns as factors weighing on buyer demand.
After another decrease in home sales in September, the Canadian Real Estate Association (CREA) updated its home sales activity forecast for 2026 and 2027 for the third time, suggesting the country could end up with a decline in sales despite initial hope for growth.
The association updated its predictions for the third time this year on Friday, saying “it’s been another roller-coaster year” for real-estate.
While previous CREA forecasts indicated a slight increase in sales in 2026, it now suggests home re-sales could plummet by 5.2 per cent compared to 2025, with only 444,530 residential properties expected to trade hands through the Canadian MLS Systems.
Alberta is the province expected to see the largest decline, with nine per cent less sales expected than last year, followed by Nova Scotia and Prince Edward Island at 7.7 per cent less sales. In contrast, Ontario could be the province with the smallest drop, with only three per cent less sales expected.
Meanwhile, the association suggests sales could go up by 4.4 per cent in 2027, while Ontario could see an increase of 5.3 per cent.
Canadian home sales fell again in September
CREA’s new predictions come as sales across the country continued to scale down in September.
According to a report published by the association on Friday, national home sales have declined by 2.3 per cent from August to September. Sales were also 7.7 per cent lower than last year at this time.
In a statement, CREA’s Senior Economist Shaun Cathcart said the decline comes after the market appeared to be making a slight progress on demand, supply, and prices, but now seemed to take a step back.
Although significant, Cathcart said the numbers were not a surprise, given that fixed mortgage rates have just increased in September, and as the Bank of Canada is expected to hike up its interest rate after holding it at 2.25 per cent since last December.
“The big question going forward is how much farther will the Bank have to go to keep a lid on inflation next year? Until that becomes clearer, this fresh round of uncertainty will likely send some buyers back to the sidelines,” he said in a statement.
Why are sales declining?
The real estate market has been facing a decline in sales, prices, and inventory for the past year, after reaching a peak after the pandemic.
According to CREA, a big part of the drop could reflect existing economic uncertainty. While last year, buyers were waiting on the sidelines while on-and-off tariffs from the U.S. President Donald Trump provoked a shift in the global economy, this year, inflation risks from a global energy crisis based on conflicts in the Middle East, and its impact on costs also translated into uncertainty.
In addition, buyers are still waiting to see whether the Bank of Canada will keep holding its interest rate.
What happens to Canadian home prices?
While prices have also been coming down since their peak in 2022, including last year when they fell by 1.5 per cent, CREA’s forecast indicates they might go up slightly.
According to the report, average home sale prices could go up by 0.2 by the end of 2026, reaching a $681,681 average.
Additionally, they are expected to continue rising next year, reaching a 1.2 per cent increase, at an average price of $689,909.
With one of the country’s most expensive average prices, behind only British Columbia, Ontario is expected to see a price drop of three per cent by the end of the year, with homes going for an average of $809,334. Prices are expected to pick up again in 2027 in the province, reaching $815,100 by the end of next year.
