TD Economics has revised its predictions for home sales and prices in 2026, anticipating a decline rather than an increase. The forecast now indicates a 1.8 percent year-over-year drop in sales and a 0.3 percent decrease in national home prices. Earlier projections had suggested a 9.3 percent increase in sales and a 4.1 percent rise in prices for the year.
Economist Rishi Sondhi noted that the housing market is expected to take most of the year to recover from first-quarter setbacks due to factors such as economic uncertainties and cost-of-living pressures. Weather conditions in Central and Atlantic Canada, along with affordability challenges in Ontario and British Columbia, have contributed to weaker market performance.
Ontario and B.C. saw significant declines in both sales and prices in the first quarter, leading to downward revisions in TD’s forecasts. Ontario is now projected to experience a 3.2 percent decrease in transactions, while B.C. is expected to see a 0.2 percent decline. Price declines of four percent in Ontario and 1.2 percent in B.C. are also anticipated.
Sondhi highlighted that pent-up demand has not rebounded as quickly as anticipated, potentially necessitating further price adjustments to stimulate market activity. External factors such as geopolitical tensions in the Middle East and upcoming trade negotiations could impact the housing market dynamics.
Looking ahead, TD foresees a rebound in Canadian home sales in 2027, driven by improved economic conditions. The report predicts a 9.6 percent increase in sales and a 2.7 percent rise in average prices for that year.