Toronto and Vancouver drop to weakest housing markets in UBS global ranking

Even though home prices in Toronto and Vancouver have dropped quickly in recent years, they remain expensive by international standards. Photo by R.J. Johnston Toronto Star/Toronto Star via Getty Images

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Toronto and Vancouver were named the two weakest housing markets internationally in 2026, in Swiss bank UBS Group AG’s global real estate bubble index, released on Tuesday. However, UBS also rated the two Canadian cities as being at “moderate” risk of a bubble in the sector.

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Inflation-adjusted home prices in both cities’ markets plunged by about 10 per cent year over year, compared with the rest of the global urban centres analyzed, which ticked up by just about 0.5 per cent on average. Seoul, South Korea, was at the top of the index, with the strongest annual increase in home price growth at 11 per cent, followed by Lisbon, Portugal (up 10 per cent) and Madrid (up eight per cent).

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The UBS report selected cities that reflected their housing markets’ importance to global financial markets and residential real estate investment.

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This is a major reversal for the two Canadian cities from their peak years. Between 2014 and 2022, Toronto had been the strongest market among the cities analyzed by UBS before dropping to the bottom of the pack in 2026, as prices sank by 30 per cent. Vancouver home prices also fell 20 per cent since hitting their peak in 2022.

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Even though home prices in these cities have dropped quickly in recent years, they remain expensive by international standards, said Aled ab Iorwerth, deputy chief economist at the Canada Mortgage and Housing Corporation (CMHC). The benchmark home price in the Greater Toronto Area has hovered around the $930,000-mark since March of this year, according to the latest data from the Toronto Regional Real Estate Board. In Metro Vancouver, the benchmark home price was about $1.08 million in August, according to Greater Vancouver Realtors.

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The UBS report’s global price-to-income index, which looks at the number of years of average income it takes to purchase a 650-square-foot apartment, placed Toronto at the bottom and Vancouver on the lower end (roughly around five years). This would still make these Canadian cities more affordable compared with other urban centres, such as Paris, which requires an average of more than a decade’s income, for example, ab Iorwerth said.

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“From 2006 onwards, home prices in Toronto and Vancouver were really growing,” he said, adding that economic and population growth, coupled with these cities attracting high-tech industries, led these urban centres to outpace others in terms of home price growth. “They became very unaffordable.”

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This was a trend seen in other major cities, such as Sydney, Australia, San Francisco and Boston in the U.S., which experienced tremendous price growth over the past decade-and-a-half as well, he added.

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But after the homebuying surge seen during the COVID-19 pandemic, Toronto and Vancouver prices began to flatline. As well, as these cities became more expensive, people started to move to other cities instead, leading to price growth in other metros, such as Ottawa and Montreal, ab Iorwerth said.

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In the past year, general economic uncertainty has meant that people have been more reluctant to make large capital investments, such as purchasing a home. “The other impact, and maybe this is exaggerated in Toronto, is the fall … in the condo sector,” ab Iorwerth said.

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According to a May report from Toronto-Dominion Economics, GTA resale benchmark condo prices fell 10 per cent year over year in the first quarter of 2026, and the bank expects prices won’t trend higher until 2028. By that time, it projects prices will have plummeted 25 to 30 per cent from their early 2022 peak.