Canada’s housing market is expected to experience a slow and uneven recovery as economic uncertainty, affordability challenges, and slower population growth continue to influence demand. High borrowing costs, elevated price-to-income ratios, and cautious consumer confidence are expected to keep home sales below long-term averages in 2026. Rental markets are moving toward more balanced conditions as increased supply leads to higher vacancy rates and slower rent growth, giving renters more flexibility before transitioning to homeownership.

Housing construction activity is projected to remain below historical averages, with condominium development particularly affected by weak pre-construction sales and higher costs. Purpose-built rental housing is expected to remain the primary driver of new supply, supported by government programs and previously approved projects. Regional conditions are expected to vary, with some markets maintaining stronger activity while others face slower growth, reflecting differences in affordability, economic conditions, and population trends.

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