TD Economics has revised its predictions for home sales and prices in 2026, anticipating a decline in both areas due to lackluster performance in recent quarters. The forecast now projects a 1.8% year-over-year decrease in sales and a marginal 0.3% drop in national home prices. This adjustment is a significant shift from the initial expectation of a 9.3% increase in sales and a 4.1% rise in prices by the end of the year.
Economist Rishi Sondhi highlighted the challenges facing the housing market, attributing the sluggish performance to various factors such as economic uncertainties and rising living costs. The impact of adverse weather conditions in Central and Atlantic Canada, along with subdued activity in British Columbia, has further dampened housing market activity.
Ontario and British Columbia experienced the most notable downgrades in sales and prices, reflecting substantial declines in the first quarter. Affordability issues persist in these provinces, leading potential buyers to adopt a cautious approach, waiting for market stabilization.
Looking ahead, TD Economics foresees a potential recovery in 2027, driven by improved economic conditions and job market prospects. The forecast anticipates a rebound in home sales with a 9.6% year-over-year increase and a 2.7% uptick in average prices, signaling a more positive outlook for the Canadian housing market in the coming year.
