Real Estate Forecast for the Next 5 Years in Canada: 2026 to 2031

Quick Answer

Two of the most credible forecasters in the country currently disagree about where Canadian home prices are going this year. That single fact tells you more about the next five years than any headline prediction will.

In its July 15, 2026 revision, the Canadian Real Estate Association forecast the national average home price rising 1.1% to $686,710 in 2026. One week later, on July 22, CMHC’s mid-year update said national home prices are expected to decline in 2026 before returning to modest growth in 2027 and 2028.

Expect a slow, uneven, regionally split market through 2031. Prairie markets are positioned to lead price growth, while British Columbia and Ontario sit at the back of the pack. Sales should recover gradually from 2027 but stay below the levels Canada averaged over the last decade. Interest rates have stopped being the main story. Population growth, local job markets and construction volumes now matter more.

+1.1% CREA’s 2026 national average price forecast, to $686,710 (July 15, 2026 revision)

2.25% Bank of Canada policy rate, held for a sixth consecutive decision on July 15, 2026

Negative Population growth in Toronto and Vancouver, per CMHC’s housing supply research

What the Official Forecasts Say Right Now

Most five-year forecasts you will read are built on adjectives. This one starts with the two organizations that actually publish numbers, and with the fact that they currently do not agree.

Forecaster	2026 National Prices	2027 and Beyond	Published
CREA	Up 1.1%, to an average of $686,710	Sales up 3.7% in 2027 to 480,567 units	July 15, 2026
CMHC	Decline expected	Modest price growth in 2027 and 2028, sales recover through 2028 but stay below the last decade’s average	July 22, 2026

Sources: CREA quarterly forecasts and CMHC Housing Market Outlook.

Why They Disagree

Both organizations have good economists working from the same underlying data. They landed in different places because the market is genuinely balanced on a knife edge right now, and because they are measuring slightly different things.

The CREA figure is a national average sale price. Averages move when the mix of what sells changes, not only when values change. If more $1.4 million detached homes in the GTA sell relative to $420,000 Prairie townhomes, the national average rises even if no individual house gained a dollar of value. CMHC is looking more closely at underlying price levels and at continued adjustment to weak demand.

In practice, both can be right at once. A flat to slightly positive national average alongside softening real values in the two largest provinces is exactly what you would expect in a market where activity is shifting toward cheaper regions.

For anyone buying a specific house, neither national number is the one that matters. Your local board’s benchmark price, for your property type, in your neighbourhood, is.

Interest Rates: The Story Has Changed

The Bank of Canada held its policy rate at 2.25% on July 15, 2026, the sixth consecutive hold. The Bank Rate sits at 2.5% and prime has been steady at 4.45%. In the accompanying Monetary Policy Report the Bank projected Canadian GDP growth of 0.7% in 2026, rising to 1.8% in both 2027 and 2028. The next scheduled announcement is September 2, 2026.

Headline inflation has run above 3% on higher oil prices tied to the Middle East conflict, but inflation excluding gasoline has stayed near 2%. The Bank has signalled it is willing to look through an energy price shock, which is why markets are no longer pricing meaningful movement in either direction this year.

Here is the practical takeaway most articles miss. Falling rates were supposed to unlock the market. Rates did fall, from the peaks of 2023 and 2024 down to 2.25% today, and demand still has not come roaring back. CMHC’s own summer commentary is blunt about it: affordability has improved in several markets and buyers are still sitting on the sidelines.

That means the next five years will not be rescued by cheap money. What is holding buyers back is a combination of weak income growth, job insecurity and simple caution, and those take considerably longer to fix than a rate cut. We broke down exactly how far mortgage payments have outpaced income growth over the last decade, and that gap is the real story behind the affordability numbers above.

What to Actually Calculate Before You Buy

• Your payment at a renewal rate 1.5 percentage points above today’s
• Property taxes for that specific municipality
• Condo fees, and their increase history over five years
• Home insurance and utilities
• Land transfer tax and closing costs
• A repair reserve of roughly 1% of home value per year

If the payment only works at today’s exact rate with nothing left over, the house is too expensive for you regardless of what any forecast says.

Source: Bank of Canada rate announcement, July 15, 2026.

Will House Prices Go Down in Canada?

In some markets and some property types, yes, and it is already happening. A broad national crash is a different question, and the evidence does not support one.

The distinction that matters is between a price correction and a market collapse. Corrections are segment-specific. Right now the clearest pressure points are concentrated and identifiable.

• Condominiums in Toronto and Vancouver, where investor demand has thinned
• Investor-heavy buildings with high fees and weak owner-occupier appeal
• Pre-construction units bought at 2021 and 2022 pricing now closing into a softer resale market
• Higher-priced detached homes where the qualifying buyer pool has narrowed

What is holding the floor up is the opposite side of the ledger. CMHC expects housing starts to keep declining through 2026 to 2028 as builders react to unsold inventory and high construction costs, with the weakest construction in Ontario and British Columbia, particularly in condominiums. Fewer homes being built today means less supply arriving in 2029 and 2030. That is a structural argument against a sustained crash, even in a weak demand environment.

A crash needs forced selling at scale. Forced selling needs either a serious employment shock or a rate spike. As of the July 2026 outlooks, neither is the base case.

City by City Outlook: 2026 to 2031

These are directional outlooks, not price guarantees. They are built on CREA’s provincial forecasts, CMHC’s regional commentary and the local demand drivers each market actually has. Nobody can forecast a specific city’s price five years out with precision, and you should be skeptical of anyone who claims to.

Market	2026 to 2031 Outlook	What the Data Supports
Calgary	Above-average growth	Alberta prices resumed rising in Q2 2026 per CREA, CMHC expects Prairie markets to lead national price growth
Edmonton	Above-average growth	Same Prairie tailwind, plus CMHC found rental affordability improved in Edmonton on higher supply and wage growth
Saskatoon and Regina	Moderate, steady growth	Prairie region strength with a lower entry price and less speculative history
Winnipeg	Moderate, steady growth	Affordability and stable local demand, low volatility in both directions
Toronto and GTA	Flat to slow growth	CREA forecast a sub-1% Ontario price decline in 2026, Ontario is the only province forecast to see sales increase this year
Brampton, Ajax, Hamilton	Flat near term, better later	Family and rental demand hold the floor, recovery tracks the wider GTA
Guelph and Brantford	Modest growth	Affordability spillover, but thinner local employment bases mean thinner liquidity
Ottawa	Stable	Government and institutional employment smooths both peaks and troughs
Vancouver and Metro Vancouver	Weakest growth near term	CREA forecast a sub-1% B.C. price decline in 2026, CMHC expects high rental vacancies as record completions land
Abbotsford and Fraser Valley	Moderate	Relative affordability inside an expensive province
Halifax	Moderate, with a caution	Population growth has been a real driver, but CMHC flagged Halifax among the worst for deteriorating rental affordability
St. John’s	Solid	Newfoundland and Labrador was the last province still in full seller’s market conditions as of CREA’s July 2026 update

If you are weighing which markets to commit capital to rather than which one to live in, our breakdown of the top Canadian cities for real estate investment goes deeper on the yield and growth trade-offs in each. For a closer look at what is happening right now in the GTA specifically, see our Toronto housing market update and our note on what the rise in new listings means for Toronto buyers.

The Population Shift Nobody Is Pricing In Properly

This is the part of the forecast most articles skip, and it is arguably the single most important variable for 2029 through 2031.

Canadian population growth has slowed considerably, driven largely by lower non-permanent resident inflows. CMHC’s housing supply research found population growth slowed across major census metropolitan areas and turned negative in Toronto and Vancouver. British Columbia is expected to see international migration keep declining in 2026, following the same pattern seen in 2025.

For the last fifteen years, the standard Canadian real estate argument was simple: immigration is enormous, supply is short, therefore prices rise. The supply half of that argument still holds. The demand half no longer does, at least not at the same magnitude.

This matters most for investors. Rental demand in the big two cities was built on a population inflow that has reversed, while purpose-built rental completions are arriving in record numbers. CMHC expects vacancy rates to rise and asking rent growth to slow, most noticeably in larger markets. If your investment thesis for a Toronto or Vancouver condo assumes 2022-style rent escalation, that thesis needs rebuilding.

The flip side is that Prairie and Atlantic markets are absorbing internal migration out of expensive provinces, which is part of why CMHC expects them to lead on price. That regional shift is also tied to policy. Canada’s growing focus on affordable housing development is concentrated in exactly these secondary markets, which reinforces the price advantage they already have.

Supply, Policy and the Long Game

Canada is still not building enough homes to fix affordability, and the near-term direction is backwards. Starts are forecast to fall through 2028 because developers are responding rationally to unsold inventory and high construction costs, a squeeze that the ongoing global tariff war has made worse on the materials side. Condominium and ground-oriented construction has been the weakest segment.

On the demand-support side, it is also worth understanding what programs are winding down. CMHC’s First-Time Home Buyer Incentive is nearing its conclusion, which removes one of the tools some buyers were relying on to bridge the affordability gap.

Where new homes get built matters as much as how many. Transit access, servicing capacity and commute times increasingly decide which suburban communities hold value and which stall. If you want the fuller picture on how planning decisions and infrastructure pressure feed into housing costs, we covered that in from housing crisis to transit nightmare: battling urban sprawl.

Employment geography is the other half of it. Housing demand follows jobs, and jobs follow commercial investment. Office consolidation, logistics corridors, healthcare and post-secondary expansion all reshape which neighbourhoods people want to live in, usually a year or two before residential prices react. Our overview of commercial real estate trends is worth reading alongside this forecast if you are trying to get ahead of that lag.

Source: CMHC Summer 2026 Housing Market Outlook update.

Buying New Construction in This Market

Softer resale pricing changes the arithmetic on new builds. Builders in slower markets are competing harder, which can mean incentives, upgrades or price adjustments that were unthinkable three years ago. It also means you need to underwrite closing costs carefully, because appraisal gap risk on pre-construction is real when values have moved sideways since you signed.

One line item buyers routinely underestimate is tax. GST and HST rebate rules on new housing can shift your effective purchase price meaningfully, and they work differently depending on price band, province, and whether you plan to live in the home or rent it out. Before you sign anything on a new build, read our explainer on the HST and GST rebate for new homes in Canada, then confirm the current rules with your lawyer, since these programs are periodically revised. There have also been broader real estate tax changes agents and buyers need to track this cycle, beyond just the new-home rebate.

For buyers outside Canada, or Canadians advising family abroad, purchase eligibility is a separate question from affordability and the rules have changed more than once in recent years. We keep a current summary of whether foreigners can buy property in Canada, including the exemptions people most often miss, and a closer look at the recent foreign buyer ban updates and what they mean for your clients specifically.

What Would Break This Forecast

Any honest five-year outlook should tell you what it might be wrong about. Here are the four developments most likely to invalidate the picture above.

1. A sharper employment downturn. Unemployment has been running around 6.5%. A move meaningfully above that, concentrated in one region, would turn a soft market into a genuinely falling one there.
2. A sustained inflation problem. The Bank has looked through the oil-driven spike because core measures held near target. If price pressure spreads beyond energy, the rate outlook changes and so does everything downstream of it.
3. A population policy reversal. Immigration targets are a federal lever. A significant increase would restore demand in exactly the markets currently forecast to be weakest.
4. A construction cost break. If material and labour costs ease materially, starts recover faster than expected, and the 2029 to 2031 supply picture looks very different.

Watch three things: Bank of Canada announcement dates, CREA’s quarterly forecast revisions, and CMHC’s twice-yearly outlook updates. Those will tell you whether this forecast is holding long before the price data does.

For Real Estate Professionals: What This Cycle Actually Demands

Everything above is the client-facing picture. If you work in this industry, the strategic read is different.

A market like this rewards agents who can explain data and punishes agents who can only quote headlines. When CREA says prices are up 1.1% and CMHC says prices are falling, your client will bring you both headlines and expect you to reconcile them. That conversation is where trust is either built or lost.

Three Things That Separate Agents Who Grow From Agents Who Stall

• Genuine local data fluency, not the national average but your board’s benchmark price for the specific property type and neighbourhood, month over month
• Long-cycle follow-up, because buyers who are not ready today are early rather than lost, and the agent still in contact in eighteen months writes the deal
• Content that answers the question before the call, since buyers research extensively before they contact anyone

If you are considering the industry, the entry path in Ontario is more structured than most people expect, and it is worth understanding the timeline and cost before you commit. Our guide to how to become a real estate agent in Ontario walks through the registration process.

It is also worth knowing what you are walking into competitively, which is why we published a look at how many real estate agents are there in Ontario. In a slower market, agent count relative to transaction volume is not a trivia statistic. It is the most important input into your business plan.

Market knowledge only converts into a career when it sits on top of compliant, client-first practice. The real estate services rules in Canada have tightened around disclosure and representation, and understanding them properly is what separates a durable business from a risky one.

FAQ: Canadian Housing Market Forecast

The Bottom Line

The next five years will not be decided by a national number. They will be decided by whether the city you are buying in is gaining or losing people, whether its employment base is expanding, and whether anything is actually being built there.

For buyers, that means payment stability and location quality matter more than timing the bottom. For investors, it means cash flow has to work today, because the appreciation assumption that carried the last decade is on much shakier ground. For agents, it means the ability to explain a divided market clearly is now the core skill of the job.

Market data in this article reflects the most recent published forecasts available as of August 2026, drawn from the Canadian Real Estate Association, CMHC and the Bank of Canada. Forecasts are subject to revision. This article is general information, not financial, legal or tax advice. Speak with a licensed professional about your specific situation.