Canada Housing Market Remains Subdued Amid Economic Uncertainty

Canada's housing market is expected to remain subdued for the remainder of 2026 due to various economic and demographic factors, according to a report from Canada Mortgage and Housing Corp. (CMHC).

The CMHC's 2026 Housing Market Outlook Mid-Year Update noted that slow population growth, high borrowing costs, and economic uncertainty will continue to weigh on demand for housing in 18 major municipalities.

One of the main factors contributing to this trend is the Canadian economy's expected slow growth, which is being driven by reduced consumer spending, government investment, and exports. Tariffs and the ongoing war in the Middle East are also causing uncertainty and clouding inflationary expectations.

As a result, CMHC expects mortgage rates to remain steady or even increase slightly over the next two years. Additionally, reduced immigration quotas have led to a decline in population growth, further dampening housing demand.

The report forecasts that this trend will continue for the rest of 2026, leading to lower prices. However, it notes that the market is expected to rebound in 2027, with sales eventually returning to decade-average levels by the end of 2028.