Policymakers broke Canada’s real estate market, and now it faces 7 years of bad luck. The Canadian Real Estate Association (CREA) slashed growth expectations for sales and prices, forecasting a 7th year of stagnating prices. They warn the first quarter was weaker than previously anticipated, as factors that drove growth before are over. Even with the expectations of tepid growth, their numbers show they’re still selling an optimistic narrative.
Canadian Real Estate Sales Forecast Slashed, Q1 Weaker Than Expected
Optimism for a sales recovery is fading at CREA due to a tepid start to the year. They’re forecasting sales will rise 1% from last year to 474.9k existing home sales in 2026, slashed from the 5% growth they presented in their January forecast. The revised “recovery” is now just 4,923 more sales in 2026 than 2025. Weak activity is forecast to pick up in 2027, rising 2.1% from their 2026 forecast, a downward revision from 3.5% in their original forecast.
Source: CREA.
National growth is still driven by Ontario and British Columbia (BC). Ontario sales are anticipated to rise 2.6% this year, a significant cut from the 8.5% forecast in January. BC saw its original forecast of 8.3% growth slashed to just 2.4% for 2026. Home sales are also expected to fall in four provinces: Manitoba (-6.3% in 2026 ), Nova Scotia (-3.0%), Alberta (-2.2%), and Saskatchewan (-2.2%).
Canadian Real Estate Prices Forecast To Be Flat
The industry is also slashing its price forecast. Annual growth was slashed from 2.8% in the January forecast, the average price is now expected to rise just 1.5% to $688,955. That’s notably less than inflation, with CREA noting their forecast would mark a 7th year of prices hovering near $700,000 by 2027. Prices aren’t crashing, but they also aren’t budging much either.
Source: CREA.
Major markets that are expected to lead sales aren’t anticipated to see much in terms of price growth. Ontario’s average price is forecast to reach $835,467 in 2026, up 0.1% (+$798) higher from 2025. Over in BC, the average is forecast to reach $956,248, up 0.3% (+$3,318). It’s worth noting that the average is also facing a composition change, with smaller and more expensive homes taking up a greater slice of the total composition.
Canadian Real Estate Industry Narrative Doesn’t Match The Forecast
CREA frames their latest forecast as a recovery, but there are a few hiccups with that claim. Central to the forecast is the belief that activity will improve as sidelined buyers return, especially in Ontario and BC. However, the revised forecast shows both provinces trail the national price average. CREA is still selling a rebound story even though its own numbers describe the market moving sideways at best.
The association admits the previous demand drivers have faded, though it presented an optimistic escape. It acknowledges the slow down in provinces where activity had been driven due to record population growth, which it says is “no longer a factor.” However, it also notes that the 2027 sales and price forecast could be revised upward— but only if higher rates prove unnecessary, and the oil shock inflation is short-lived.
Despite the forecast being presented as a downgrade, CREA almost frames this as a worst case scenario. Unfortunately, the past few years have proven that the industry forecasts tend to be optimistic, with more downward revisions than upward.
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