Home prices expected to tick higher in 2026 amid market ‘reset’: Royal LePage report

The national aggregate home price is expected to increase one per cent annually to around $823K in the fourth quarter of 2026. Royal LePage president Phil Sophe

TORONTO — Royal LePage is forecasting an uptick in home prices for 2026 as it says the Canadian housing market is primed for a “reset” with more buyers making their move.

The real estate firm projects the national aggregate home price will increase one per cent year-over-year to $823,016 in the fourth quarter of 2026.

Single-family detached home prices are forecast to increase two per cent to $876,934 and condominium prices are expected to decrease 2.5 per cent to $563,918.

It said its projections for the upcoming year follow “significant economic and political uncertainty” in 2025, pointing to the trade war with the U.S. and change in federal leadership that forced a recalibration of market expectations.

This year has also included four cuts by the Bank of Canada to its key policy rate, which many industry watchers believe likely kept some buyers on the sidelines as they waited for borrowing costs to keep coming down.

But with the key rate now sitting at 2.25 per cent, economists widely expect the central bank will hit pause on any further cuts in the near term unless the economy shows major signs of weakness, which could prompt increased homebuying activity.

Royal LePage president and CEO Phil Soper said the combination of lower borrowing costs, increased supply and reduced competition have created a more favourable environment for buyers.

“I think the general feeling among more people on the street, consumers, is that the interest rate decline period is near an end or at the end, and that’s good news because people won’t be sitting around waiting for that,” he said in an interview.

The rebound in prices is set to come a year later than Royal LePage initially believed.

Soper conceded the firm got 2025 “completely wrong” when it released its last annual housing market forecast a year ago, which at the time pointed to a “recovery” year ahead.

“Employment was high, interest rates were expected to continue falling, savings were high. So we had predicted a robust recovery, and then Trump 2.0 came along,” said Soper, adding the firm didn’t anticipate the “scale and scope” of the U.S. president’s rhetoric, nor how “aggressive” his trade policy would be.

Ultimately, buyers were spooked.

“First-time homebuyers in particular were set back,” he said.

“People were freaked out by the rhetoric coming out of the American president’s mouth and official American policy. It just set them back on their heels. Confidence plummeted.”

After the spring housing market flopped in most parts of the country, real estate data has shown a “gradual thawing” since the summer which is expected to continue into 2026.

Soper added that if a renewed trade deal between Canada and the U.S. comes to fruition, that could also provide a jolt to the economy that ripples through to the housing market.

The report said home prices are expected to rise in major markets across the country in 2026, with the exception of Canada’s two most expensive markets.

In the Vancouver and Toronto areas, the aggregate price of a home is expected to decrease 3.5 per cent to $1,147,868, and 4.5 per cent to $1,054,129, respectively, year-over-year.

Meanwhile, prices in the Montreal area are forecast to rise five per cent to $676,725. For the second year in a row, Quebec City is expected to see the greatest gains among all major regions, with an anticipated increase in the aggregate home price of 12 per cent to $501,984.

In Calgary, the aggregate price of a home is forecast to increase 1.5 per cent year-over-year to $701,061, while in Ottawa, the aggregate price should rise two per cent to $788,970.

Edmonton, Halifax and Winnipeg are also expected to see home prices rise no more than two per cent in 2026.

This report by The Canadian Press was first published Dec. 9, 2025.

Sammy Hudes, The Canadian Press