Toronto/CMEDIA: Home sales forecast for 2026 has been revised by The Canadian Real Estate Association (CREA) and is another downgrade, as CREA already revised its predictions for this year downward in April.
Having previously predicteda small increase in the number of homes sold in 2026 but CREA now expects a decline of 1.4 percent compared to 2025.
Although these factors have eased somewhat since then CREA says they still weighed on the housing market in recent months.
“Taken together, the national sales forecast for 2026 was revised slightly lower, reflecting the weak first half of the year, and slightly delayed start to the long-awaited recovery” in the housing market, the association said in a release.
Inflation was fuelled by high oil prices and raised the possibility that the Bank of Canada would raise interest rates, sending bond yields up and causing fixed mortgage rates to jump earlier this year.
Whild holding its policy rate at 2.25 percent, the Bank of Canada (BOC) says that it expects the Canadian economy to improve, despite flatlined growth over the past 18 months.
But although the economy is showing signs of improvement and inflation is easing, the BOC’s new monetary policy report warns of uncertainty driven by U.S. tariffs and the war in the Middle East.
The level of gross domestic product was “roughly unchanged from the first quarter of 2025 to the first quarter of 2026.” the BOC report indicates.
Toronto’s condo market shows signs of recovery
After a year of slow sales and cancelled projects, Toronto’s condo market is showing signs of recovery.
Data for June showed that national home sales edged up by half a percentage point from the month before, and monthly activity was up 0.9 percent compared to June 2025.
The uptick built on positive momentum in the market that started in May,CREA’s senior economist Shaun Cathcart said.
“It’s a market that’s only just finding its footing,” Cathcart said.
Last month’s benchmark price of a home was $657,700, the MLS home price index showed.
Regionally, prices were still down in Ontario, B.C. and Alberta but those declines have been shrinking, and prices across the country seem to be stabilizing, Cathcart said
“The last four years have … been a story of a really ice cold Ontario, a pretty chilly B.C. and hot markets everywhere else,” Cathcart said.
Now, he says places like the Prairies and Quebec are starting to see a slowdown whilethe Ontario and B.C. markets are expected to tick up slightly by the end of the year.
“It’s really a convergence on more normal behaviour,” Cathcart said.
With home prices stabilizing and little change in interest rates in recent months, Cathcart says it’s possible these factors could encourage some prospective buyers to come off of the sidelines.
