Canada’s housing market is heading into 2026 in a more balanced, but uneven, position after a year marked by economic uncertainty, shifting immigration levels, and changing global trade dynamics. According to Royal LePage president and CEO Philip Soper, it was not interest rates or employment that weighed most heavily on housing activity in 2025, but trade uncertainty, particularly around tariffs.
Speaking with BNN Bloomberg, Soper said that while many traditional barriers to housing eased, buyer confidence remained fragile.
Trade Uncertainty Replaced Interest Rates as the Biggest Headwind
Soper said tariffs and broader trade uncertainty emerged as the single largest factor holding back housing decisions in 2025.
“Interest rates moved from being a barrier to entry to being either neutral or even supportive,” Soper said, noting that employment conditions were stronger than expected and many economic fundamentals pointed toward a more active housing market.
Despite this, consumers remained cautious. According to Soper, when households were asked what was preventing major purchases such as homes or vehicles, trade concerns consistently ranked highest.
While difficult to quantify precisely, Soper estimates trade uncertainty likely reduced home prices by two to four per cent nationally in 2025. Even so, he noted that prices across much of the country proved relatively resilient, with the slowdown showing up more clearly in sales volumes than prices.
Home Prices Held Up Better Than Activity in 2025
Royal LePage data shows that even in Canada’s most expensive markets, price declines were modest relative to the drop in activity.
“Home prices hung in there remarkably well, even in cities like Toronto and Vancouver,” Soper said.
In those markets, weaker demand combined with healthier supply levels led to moderate price declines. In contrast, many other regions of the country saw stable pricing or small gains, reflecting more balanced supply and demand conditions.
Royal LePage’s National Housing Forecast for 2026
According to the Royal LePage 2026 Market Survey Forecast, national aggregate home prices are expected to rise 1% year-over-year to approximately $823,000 by the fourth quarter of 2026.
However, this national figure masks significant regional differences:
- Greater Toronto Area: prices forecast to decline 4.5% year-over-year
- Greater Vancouver Area: prices forecast to decline 3.5% year-over-year
- Most other regions: modest price gains expected
Soper said this divergence reflects a longer-term compression that began after the pandemic-era housing boom, where affordability gaps between Canada’s most expensive and more affordable cities have started to narrow.
Condo Market Faces Continued Pressure From Immigration Shifts
Soper pointed to immigration changes as a key factor shaping housing demand, particularly in the condominium sector.
Canada saw a reduction in immigration levels in 2025, including fewer temporary foreign workers and international students. According to Soper, this shift hit urban condo markets the hardest.
“The individual investor supplies a lot of our rental stock in big cities,” he said. When mortgage rates peaked during the post-pandemic inflation surge, the financial math stopped working for many small condo investors.
While lower rates in 2024 and 2025 were expected to bring investors back, the rebound never fully materialized.
“A big part of that was their clients, their tenants, disappeared with the much smaller quotas,” Soper explained.
Condo Prices Expected to Decline Again in 2026
Royal LePage forecasts that national condominium prices will fall 2.5% year-over-year to approximately $563,918 by the fourth quarter of 2026.
Toronto and Vancouver are expected to see the most persistent softness due to:
- Elevated condo supply
- Weaker investor demand
- Reduced rental demand tied to lower immigration
Outside of Canada’s largest urban centres, condo markets are expected to perform more steadily, with some regions posting modest gains.
A More Balanced Market Could Help First-Time Buyers
Despite the challenges, Soper said current conditions may be more supportive for younger families and first-time buyers.
Sales-to-new-listings ratios suggest neither buyers nor sellers hold a decisive advantage, creating a more balanced negotiating environment. Soper noted that buyers in expensive urban and suburban markets are increasingly able to include conditions in offers and benefit from softer pricing.
Government Policy Will Be Key Going Forward
Looking ahead, Soper emphasized that government execution will be critical to shaping housing outcomes.
“All levels of government in most regions of the country are saying the right things,” he said. “The proof will be in execution.”
He added that progress will depend on effective coordination across municipal, provincial, and federal governments, with policies translating into actual construction and meaningful increases in housing supply.
The Bottom Line
Canada’s housing market is entering 2026 with more balance than in recent years, but not without challenges. Trade uncertainty, immigration shifts, and ongoing condo softness are expected to shape outcomes across regions and property types.
While national prices are forecast to edge higher, Canada’s most expensive markets may continue to cool, offering improved conditions for buyers as the long post-pandemic adjustment continues.
References
Marfo, D. (2025, December 30). Tariffs, immigration shifts, condo softness shape Canada’s housing outlook for 2026: Royal LePage CEO. BNN Bloomberg. https://www.bnnbloomberg.ca
Royal LePage. (2025). 2026 market survey forecast. https://www.royallepage.ca
Canada Housing Market 
Leave a comment