Canadian real estate poised for a spring rebound, Royal LePage says

A house that's been sold in St. Catharines, Ont. Photo by Julie Jocsak/St. Catharines Standard/Postmedia Network files

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More homebuyers who have been waiting on the sidelines are expected to emerge as affordability improves in the first half of 2026, according to Royal LePage.

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Spring has historically been a busy time for Canadian real estate, due to the pent up demand from the slower winter months and the practicality of moving in the summer. This year is expected to be no different, Royal LePage says, though it may not be the full surge the market is used to.

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“The conditions are in place for a more active spring market in 2026,” Royal LePage chief executive Phil Soper said in a news release. “Interest rates are no longer a barrier to home ownership, inventory levels are healthy, and economic indicators continue to point to moderate growth in both GDP and employment.”

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Soper added that economic uncertainty will likely still be a drag on the market, but many families have given up on waiting for the perfect time to buy a home and are instead focused on securing a home.

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CPA Canada’s chief economist said in a press release that slower population growth and shifting buyer behaviour could limit a housing rebound in 2026.

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“Buyers heading into the spring market have a meaningful advantage over last year: lower borrowing costs; stable or lower property prices and choice,” Soper said. “In an era where home inventory is chronically constrained, inventory levels are Goldilocks healthy. Together, these conditions are creating a genuine window of opportunity, particularly for first-time buyers in Canada’s most expensive markets.”

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Canada’s interest rate environment may also help sales in the coming months. The Bank of Canada cut rates four times in 2025, but economists predict the current rate of 2.25 per cent may remain in place for the foreseeable future, potentially the whole year.

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“For homebuyers and those approaching a mortgage renewal, stability matters,” Soper said. “It provides greater certainty around financing costs and allows households to make housing decisions based on need and affordability, rather than trying to time interest rate moves.”

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This comes as the average home price declined 1.5 per cent to $807,200 nationally in the fourth quarter of 2025, though Montreal and Quebec City emerged as areas of strength.

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Toronto and Vancouver – Canada’s two biggest markets – experienced continued price declines of 5.7 per cent and 4.1 per cent year-over-year in the quarter, respectively.

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“For years, price growth in Toronto and Vancouver far outpaced the rest of the country, but our two most expensive metro markets have experienced gradual price declines for four years now, while other major cities saw steady, modest appreciation and are closing the gap,” Soper said.