Since April, the market has been showing improvement: the number of resales is rising, supply has stabilized, and prices have either stopped falling or are declining much more slowly.
RBC economists expect that as housing affordability improves, the labour market strengthens, and buyer confidence grows, more Canadians who have postponed purchasing real estate in recent years will begin returning to the market.
But specialists do not expect a fast, uniform upswing across the entire country.
“Even in the most favourable scenario, the recovery will be uneven: two steps forward may be followed by one step back, and different regions will simultaneously show both growth and decline,” notes RBC Deputy Chief Economist Robert Hogue.
2026 will end with lower sales and prices
According to RBC’s forecast, about 453,200 properties will be resold in Canada in 2026—3.6% fewer than the year before.
The average price on the benchmark index will also decline—by about 2.3%, to $794,200.
A turning point is expected next year. In 2027, the bank forecasts:
- 6.7%, to 483,600 properties;
- 0.8%, to $800,700;
- a gradual return of buyers to the market.
Nevertheless, even after the expected improvement, sales volumes will remain significantly below pre-pandemic levels, and home prices will only slightly exceed the low of the current cycle.
How many buyers have been waiting all this time?
One of the key drivers of a future recovery is pent-up demand.
RBC estimates that over the past several years, hundreds of thousands of Canadians have postponed plans to buy a home due to the sharp rise in the cost of owning property.
This is not only about potential buyers. Among those waiting for the right moment are renters who are staying in rental housing longer than planned, as well as homeowners who have delayed the decision to buy a larger home or, conversely, to downsize.
Especially noteworthy is RBC’s estimate that since 2019, Canada may have seen more than 400,000 fewer new households formed than would have been under different circumstances.
If even part of this pent-up demand returns to the market, it could provide significant support for the real estate sector.
There are other reasons for optimism as well. Canadians are currently saving at a pace close to the highest in the past 25 years, and the employment rate among people aged 25 to 34 remains above the historical average.
In RBC’s view, this accumulated demand can partially offset the decline in demand associated with slower population growth and reduced immigration.
Mortgage rates are unlikely to get cheaper
Improved housing affordability in some of Canada’s most expensive cities could also bring buyers back. However, the cost of owning property remains high—which is why RBC does not expect a sharp surge in demand.
The bank also does not forecast any significant further decline in interest rates.
In Robert Hogue’s assessment, rates have likely already reached the low point of the current cycle.
RBC expects a moderate rise in long-term rates through the end of 2027. At the same time, the Bank of Canada, according to the forecast, will hold the policy rate at its current level through the end of 2026 and will begin raising it next year.
For potential buyers, this means that counting on a significantly cheaper mortgage in the near future could be risky.
The economy could restore buyer confidence
One of the main obstacles to a market recovery remains the psychological factor.
Falling home prices, affordability challenges, a weak economy, and concerns about employment have led many Canadians to take a wait-and-see approach.
If economic conditions continue to improve, buyer confidence may gradually recover. RBC forecasts continued economic growth through the end of 2027 and expects the excess supply of labour to disappear by next spring.
Price stabilization could become another important signal for buyers.
While home prices are falling, many prefer to wait, hoping to buy cheaper. But when prices stop declining, the situation changes: potential buyers begin to worry that further waiting will no longer bring any benefit.
As the number of transactions rises and supply on the market shrinks, additional motivation may emerge for those who have long postponed buying.
The market has already gone through four “false starts”
At the same time, RBC experts advise against rushing to declare the crisis over.
Since 2023, the Canadian real estate market has already experienced four periods of improvement, which were later interrupted by external economic events.
The new upswing may also prove unstable. Among the main risks, RBC cites:
- further escalation of trade relations with the United States;
- geopolitical conflicts;
- more serious consequences of reduced immigration;
- ongoing housing affordability problems;
- a possible deterioration in economic conditions.
Therefore, specialists view the current recovery more as the beginning of a process than as the end of the crisis.
Ontario and British Columbia could rebound sharply
RBC expects the most noticeable growth in sales in 2027 in Ontario and British Columbia—two provinces that were hit particularly hard by worsening housing affordability.
In Ontario, sales are forecast to increase by 8.2% after a 0.5% decline in 2026.
In British Columbia, growth of 7.8% is expected after a 4.6% drop this year.
Prices should also shift to growth, though very modest: about 0.7% in Ontario and 0.5% in British Columbia.
At the same time, the condo market may recover more slowly. A large inventory of unsold condos in the Toronto and Vancouver areas, combined with weak investor demand, could lead to continued declines in condominium prices in 2027 as well.
Quebec will keep growing, but more slowly
For Quebec, RBC’s forecast looks more resilient, though without impressive growth.
In 2027, real estate prices in the province, according to the bank’s forecast, will rise by about 1.2%.
This is below the expected growth rates in a number of other regions; however, Quebec is among the markets that have weathered the current downturn relatively well.
Economists expect price growth to slow as population growth decelerates while housing supply increases at the same time.
For buyers, this means that Quebec is not expected to see either a sharp price collapse or a rapid return to previous growth rates.
Where will prices rise faster?
Among the most resilient markets, RBC expects the following home price growth in 2027:
- Saskatchewan — 2.5%;
- Manitoba — 1.9%;
- Quebec — 1.2%;
- New Brunswick — 0.9%;
- Newfoundland and Labrador — 1.3%;
- Nova Scotia — 1.1%;
- Prince Edward Island — 0.3%.
Alberta stands out separately. RBC expects that in 2027, sales here will increase by 7.1%, and home prices by 1.8%.
What does this mean for buyers in Montreal?
For residents of Montreal and Quebec, the forecast looks more like a gradual normalization of the market than a return to a price boom.
On the one hand, improved affordability and price stabilization may bring some buyers back to the market. On the other, mortgage rates are unlikely to provide the same advantage to those hoping to wait for a significantly cheaper loan.
Therefore, 2027 may become a year of cautious recovery: sellers will gain more confidence, buyers will have more choice, and the market will gradually begin returning to balance.
But, as RBC emphasizes, this path is unlikely to be straight. After several years of high housing costs, expensive credit, and economic uncertainty, Canada’s real estate market still has a considerable way to go before a full recovery.
