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OTTAWA, Ontario, Oct. 16, 2026 (GLOBE NEWSWIRE) — The Canadian Real Estate Association (CREA) has updated its 2026 and 2027 forecasts for home sales activity and average home prices via the Multiple Listing Service® (MLS®) Systems of Canadian real estate boards and associations.

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It’s been another roller-coaster year for many of the factors that have the greatest impact on housing markets. In 2025, it was on and off tariffs and the related uncertainty for prospective home buyers. This year, it has been on and off inflation risks from a global energy crisis and its impact on borrowing costs.

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Fixed mortgage rates jumped higher this spring following the start of the Iran conflict. Oil prices and the risk of Bank of Canada rate hikes, along with fixed mortgage rates, then cooled off over the summer.

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As of early September, oil prices were rising again amid a number of global capacity and refinery disruptions. Combined with a notably more hawkish tone from the Bank of Canada, fixed mortgage rates have jumped even higher, and markets are now pricing in approximately 100 basis points of rate hikes by this time next year.

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The recent shift in fixed-rate mortgage affordability, combined with continued uncertainty around variable rates, has already shown up in the form of lower home sales activity in September.

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How far the Bank will ultimately have to go to rein in inflation next year is a major unknown; however, events already in the books since early September have resulted in a downward revision to the forecast for home sales, and a small adjustment to the forecast for home prices over the balance of 2026 and in 2027.

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Some 444,530 residential properties are forecast to trade hands via Canadian MLS® Systems in 2026, representing a 5.2% decline from 2025. The downward revision from the previous forecast reflects lower expected activity in the final four months of the year. Given the main reason is higher fixed mortgage rates and uncertainty around how much variable rates will ultimately have to rise, downward revisions were spread evenly across all provinces except for Newfoundland and Labrador, where the market is still very active.

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The national average home price is forecast to edge higher by just 0.2% on an annual basis to $681,681 in 2026, slightly lower but largely unchanged from CREA’s July forecast. The national figure in 2026 is the result of a decline of 0.8% in British Columbia, along with a larger 3% dip in Ontario. These are forecast to be just offset by ongoing but slowing price growth in other provinces.

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Outside of Ontario and B.C., average price growth is expected to be back in the low-to-mid single digits on an annual basis in 2026, with the largest gains in Newfoundland and Labrador (+5.7%) and Saskatchewan (+5%).

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In 2027, national home sales are forecast to climb 4.4% to 464,235 units, with most provincial markets expected to see gains between 3% and 6%. This forecast is predicated on slow but positive economic growth, the resumption of higher population growth, and more certainty for borrowers around the path for interest rates which should bring more pent-up demand into the market even with higher borrowing costs.

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At present, this forecast assumes limited action by the Bank over the next year. The current consensus of interest rate forecasts is leaning towards the Bank hiking by less than markets have been pricing in.