According to the report by Royal LePage Real Estate Services Ltd. For 2026, Canada's real estate market will be split next year, with prices continuing to fall in the country's two largest markets while rising in smaller centers.
According to the report released Tuesday, prices in Toronto and Vancouver will decline a combined 4.5 per cent in the fourth quarter of 2026 compared to the same period in 2025, while prices on the West Coast will decline by 3.5 per cent, compared to an overall price increase in Canada of one per cent.
However, price increases are expected in several cities. Quebec City leads the way with a total price increase of 12 percent in the final quarter of 2026 compared to 2025, followed by Montreal at five percent and Regina at four percent.
Meanwhile, prices in Ottawa, Halifax and Edmonton are expected to rise by two per cent, while prices in Calgary and Winnipeg are expected to rise by 1.5 per cent.
“Canada has become more regional over time,” said Phil Soper, executive director of Royal LePage, adding that “the pandemic was a game changer in that people were able to live where they wanted to live to some extent.”
He said prices have risen faster in Calgary and Montreal than in Toronto and Vancouver since the pandemic.
“Regional differences are at work, but they are normalizing and moving closer together,” he said. “I assume the closure will last another two to three years.”
Soper said there are a few factors at play in Toronto and Vancouver that have depressed prices.
In Toronto, single-family home prices are expected to fall by one per cent, while condo prices are expected to fall by 6.5 per cent by the end of 2026.
“In Toronto and Vancouver, there are even deeper gaps to overcome, particularly in the condo sector. There's just too much inventory,” he said, adding that the population needs to rebound to boost price growth in that sector.
In Vancouver, where single-family home prices are expected to fall by five per cent and condo prices by three per cent, Soper said the “irrational exuberance” that has gripped this market during the pandemic is still “sorting itself out.”
In addition, he said, bans on foreign buyers have hit Vancouver harder than any other city in Canada, as has the sharp decline in immigration.
“It’s a big city, but nowhere near as big as Toronto,” he said. “These things have a bigger impact.”
A particular set of circumstances has boosted demand for housing in Quebec City, Soper said, citing a combination of housing shortages, difficult geographies that made building difficult and a boom in some industrial areas, such as high-technology.
People tend to focus on house prices, but he said rising sales are the “biggest trend” and a leading indicator of where the market is heading.
“Over the summer, volumes started to pick up in Vancouver and Toronto because … obviously we're at the end of a long period of monetary easing,” he said. “So consumers got the message that we are reaching normal interest rates.”
Soper also said he does not expect the five-year fixed mortgage rates to return to two or three percent that were offered at the height of the 2021 housing boom.
• Email: gmvsuhanic@postmedia.com