Canada Housing Market Forecast 2026–2027: Key Insights From RBC Economics

Understanding Canada's housing recovery, home sales, prices and the outlook for Ontario

Market Insights | Canadian Real Estate | Royal Canadian Realty

Canada's housing market is beginning to show signs of recovery, according to RBC Economics, although the improvement is expected to be gradual rather than immediate. RBC forecasts Canadian home resales to decline 3.6% in 2026 to approximately 453,200 transactions, before increasing 6.7% in 2027 to approximately 483,600 transactions.

RBC also forecasts its benchmark home price measure to decline 2.3% in 2026 to approximately $794,200, followed by a modest 0.8% increase in 2027 to approximately $800,700.

For Ontario, RBC expects a relatively small decline in home sales during 2026, followed by stronger activity in 2027. These forecasts provide useful context for understanding the broader Canadian real estate market, although actual conditions can vary significantly by city, neighbourhood, property type and price range.

Is Canada's Housing Market Recovering?

RBC Economics reports that Canadian home resales have been improving since April 2026. Inventory has levelled off in some areas, while prices are either stabilizing or declining at a slower pace.

These developments suggest that the housing market may be moving from a period of correction toward a gradual recovery. However, RBC has emphasized that the recovery is unlikely to move evenly across Canada. Some regions may improve faster than others, and periods of stronger activity could still be followed by slower conditions.

Canada Housing Market Forecast for 2026 and 2027

RBC's national housing forecast shows weaker overall numbers for 2026 followed by an improvement in both home sales and benchmark prices during 2027.

Even with the expected improvement in 2027, RBC anticipates that national sales activity will remain below pre-pandemic levels and home values will remain only modestly above their recent cyclical low.

Why Canada's Housing Recovery May Take Time

1. Pent-Up Housing Demand

One of the important factors in RBC's outlook is the number of Canadian households that may have delayed buying a home because of higher ownership costs.

RBC estimates that more than 400,000 Canadian households may not have formed since 2019. This could include renters remaining in rental housing longer than originally planned and existing homeowners postponing decisions to move into larger or smaller properties.

If affordability and economic conditions gradually improve, some of this delayed housing demand could return to the market.

2. Housing Affordability Remains a Challenge

Although affordability has improved in some Canadian markets, housing ownership costs remain elevated, particularly in several of Canada's larger and more expensive markets. RBC identifies this as one of the main reasons the recovery is expected to remain gradual.

3. Interest Rates May Be Near Their Cycle Low

RBC's outlook suggests that interest rates may already be near the lowest point of the current cycle. The bank expects the Bank of Canada policy rate to remain steady through the remainder of 2026 before potentially increasing in 2027.

Interest-rate forecasts can change as inflation, employment, economic growth and other economic conditions develop. Buyers should therefore consider financing decisions based on their individual circumstances rather than relying solely on future rate forecasts.

4. Economic Conditions Could Influence Buyer Confidence

RBC also points to improving economic conditions as a factor that could support housing demand. Canadians are saving at a relatively high rate, employment among people aged 25 to 34 is above its historical average, and RBC expects labour-market conditions to improve into 2027.

A more stable economic environment, together with greater stability in home prices, could gradually improve confidence among prospective home buyers.

Ontario Housing Market Forecast for 2027

Ontario is expected to be one of the provinces with stronger home-sales growth in 2027. According to RBC's forecast, Ontario home sales are projected to increase 8.2% in 2027 after declining approximately 0.5% in 2026.

Home values in Ontario are forecast to rise approximately 0.7% in 2027. The projected increase is relatively modest, suggesting that stronger transaction activity would not necessarily translate into rapid price appreciation.

What Could the Housing Outlook Mean for Home Buyers?

RBC's forecast provides prospective buyers with economic context, but it does not determine whether purchasing a home is appropriate for an individual buyer.

Buyers may want to consider their income stability, available down payment, mortgage qualification, monthly ownership costs, preferred location, property type and long-term housing needs.

Market conditions also vary locally. A neighbourhood with limited inventory may behave very differently from an area where buyers have a larger selection of homes available.

What Could the Housing Outlook Mean for Home Sellers?

Sellers should also view national and provincial forecasts as background information rather than a prediction of what an individual property will sell for.

A home's market value can be influenced by comparable sales, neighbourhood inventory, property condition, location, presentation, buyer demand and current competition.

In markets with higher inventory, pricing and presentation may become particularly important because buyers can compare a greater number of competing properties.

Will Canada's Condo Market Recover in 2027?

RBC expects the condominium segment in Toronto and Vancouver to take longer to recover than some other parts of the housing market.

Higher condo inventory and weaker investor demand are among the factors that could continue putting pressure on condominium prices into 2027.

This is another example of why national housing statistics should not be applied equally to every property type. Detached homes, townhouses and condominiums can experience very different levels of inventory and buyer demand within the same city.

How Ontario Compares With Other Provinces in 2027

Ontario is forecast to experience relatively strong sales growth in 2027, while projected price appreciation remains modest compared with some other Canadian provinces.

What Could Affect Canada's Housing Market Recovery?

Housing forecasts are based on assumptions about future economic conditions and can change. RBC has identified several risks that could affect the expected recovery, including trade tensions with the United States, geopolitical uncertainty, changes in population growth, immigration reductions and continued housing affordability challenges.

RBC has also noted that Canada's housing market has experienced several periods of apparent improvement since 2023 that were later interrupted by changing economic conditions.

Frequently Asked Questions About Canada's Housing Market

Understanding Your Local Real Estate Market

Canada's housing outlook can help buyers, sellers and homeowners understand the broader direction of the market. However, real estate remains highly local.

The conditions affecting one neighbourhood or property type may be very different from those affecting another. Reviewing current listings, recent comparable sales, local inventory and property-specific factors can provide a clearer picture of your individual situation.