CREA Trims 2026 Sales Forecast as Ontario Becomes the Only Province Expected to Grow

The Numbers Behind the Trim

The revision is a trim, not a teardown. CREA now forecasts 463,336 residential sales in 2026, a 1.4% decline from 2025, while holding its national average price forecast at $686,710 — up 1.1% and almost unchanged from its April projection, according to the Canadian Real Estate Association. For 2027, it expects sales to rebound 3.7% to 480,567 units and the average price to rise another 1.1% to $694,164. Put those two years side by side and the plateau is unmistakable.

The price line is the one owners should sit with. Two consecutive years of roughly 1% nominal growth, both explicitly expected to land below inflation, is the numeric backbone of the plateau thesis. It is a marked change from the sharper swings of recent years — a pattern of downgrades that has been building since the spring, when an oil shock drove up fixed mortgage rates and stalled the market.

A Delayed Rebound, Not a Cancelled One

CREA framed the downgrade as a timing problem. The first half of 2026 was weak, and the long-expected recovery started later than assumed — but the association still expects a more active second half, which is why the revision reads as a delay rather than a reversal. The rate backdrop supports that reading: fixed mortgage rates spiked in late March on oil-driven inflation fears, then partially eased, and the prospect of further Bank of Canada rate hikes in 2026 has been mostly taken off the table.

That stability at the policy level matters. The Bank of Canada held its rate at 2.25% in June and signalled inflation would hover near 3% before easing gradually toward target, per the Bank of Canada. Stable rates and a slow disinflation path are consistent with CREA's picture of steady normalization rather than a fresh, debt-fuelled surge.

The wider industry has been moving the same direction; earlier in the year, TD Economics slashed its own 2026 housing forecast, reversing an optimistic December call. When multiple forecasters cut at once, the signal is less about any single model and more about a shared read on a slower year.

One Country, Two Trajectories

The single most striking line in the release is provincial. Ontario is now the only province CREA expects to post an annual sales increase in 2026. Every other province is forecast flat or lower. That is an unusual shape for a national recovery — normally a rebound lifts several regions at once — and it makes Ontario the clear outlier for owners weighing whether momentum is on their side.

The divergence is not random; it tracks demographics. CREA attributed the downgrade largely to a faster-than-expected slowdown in Quebec and the East Coast, driven by sharply reduced population growth layered on historic supply shortages. The demographic cooling is broad and measurable: Statistics Canada estimated the national population fell about 0.1% in the first quarter of 2026, with the number of non-permanent residents down 4.4%, according to Statistics Canada. Ontario felt that same demographic pullback, which makes its forecast sales growth more notable, not less — the province is expected to grow despite the headwind, not because it escaped it.

That Ontario lead was already visible in live data this spring, when May resales jumped and the gain was driven disproportionately by Ontario.

Flat Nominal, Softer Real

Here is where the forecast becomes personal. A national average near $700,000 for years running sounds like stability, and in nominal terms it is. The catch is inflation. With the Consumer Price Index up 3.2% year-over-year in May — 2.2% excluding gasoline — set against CREA's forecast of roughly 1% price growth in both 2026 and 2027, the real value of a typical home would still slip even as the sticker number holds, a gap the Statistics Canada inflation data makes plain. Below-inflation gains are, in purchasing-power terms, a quiet decline.

The national average also hides real provincial spread. CREA expects sub-1% price declines in British Columbia and Ontario, offset by slower but still-positive growth elsewhere, with Alberta and Newfoundland and Labrador as standouts — the latter described as Canada's last remaining full-on seller's market. So the plateau is an average of very different paths, not a uniform flat line.

For owners, the practical takeaway is expectation-setting. If your plan assumed equity would compound quickly, the forecast argues for patience; if you feared a steep drop, it argues against panic. That measured environment is part of why some households are simply staying put — a dynamic captured when a CPA Canada survey found 55% of homeowners planning to stay indefinitely as the market locked up.

The Signals That Confirm or Challenge the Forecast

A forecast is a base case, and the next few data releases will test it. Three things are worth tracking. First, whether the second-half pickup CREA is counting on actually shows up in the monthly sales numbers, or whether activity stays soft. Second, whether Ontario's growth lead broadens to other provinces or stays a party of one. Third, whether population trends stabilize or keep cooling, since demographics are now doing more of the work in the regional split than interest rates are.

None of this calls for a snap decision. The forecast's value is in framing a realistic range — modest sales recovery, near-flat prices, sharp regional variation — that owners can plan around rather than react to. Local conditions will still diverge from the national story, as they did when tightening GTA resale conditions pointed to a price floor even as national figures stayed muted. Watch the provincial data, not just the headline, before drawing conclusions about your own market.