TD Economics has revised its predictions for home sales and prices in 2026, anticipating a decline rather than growth due to lackluster performance in the past two quarters. The forecast now projects a 1.8 percent decrease in sales and a 0.3 percent drop in national home prices compared to the previous estimate of a 9.3 percent increase in sales and a 4.1 percent rise in prices. Economist Rishi Sondhi noted that it may take the rest of the year for the housing market to recover from first-quarter setbacks, attributing the sluggish sales to economic uncertainties and cost-of-living pressures.
Significant downgrades were given to Ontario and B.C. in terms of sales and prices after notable declines in the first quarter. The report highlighted affordability challenges in these provinces, suggesting that potential buyers are likely waiting for market stabilization. TD’s earlier projections of a 13 percent rise in Ontario home sales and a 15.1 percent increase in B.C. have been revised to show a 3.2 percent and 0.2 percent decrease, respectively. Price expectations have also been adjusted downward, with Ontario forecasted to see a 4 percent decline and B.C. a 1.2 percent drop.
Sondhi pointed out that pent-up demand has not re-emerged as swiftly as anticipated, hinting that further price adjustments might be necessary to stimulate activity. External factors like geopolitical tensions in the Middle East could impact the market dynamics, potentially accelerating demand in Ontario and B.C. beyond current expectations. Additionally, ongoing CUSMA negotiations are flagged as influential for the broader economy and housing sector.
Looking ahead, TD anticipates a rebound in Canadian home sales in 2027, driven by improved economic conditions and job market growth, which could lead to a rise in average prices. The latest forecast projects a 9.6 percent increase in home sales and a 2.7 percent price hike in 2027.
