Canadian Home Prices Plummet to 2016 Levels Amid Rent Growth Mystery
Canadian home prices have been rising, but not in real terms. According to BIS data, they increased by 0.78% in Q2 2026, marking the first increase in a year. However, when adjusted for inflation, they actually fell nearly 30% since their peak and are now back at 2016 levels.
Despite this, home prices remain out of reach for many Canadians. The Bank of Canada's study on rent growth shows that asking rents surged by over 20% between Q4 2021 and Q4 2026, with population growth and financing explaining most of the increase. However, there is a mysterious surge in rents in early 2020, before the pandemic, which remains unexplained.
The Canadian economy experienced some mixed signals this week. While GDP was flat in July, StatCan revisions added 0.1% more to reported growth in 2026, representing about 1 in 10 dollars of that year's growth. Meanwhile, Canadian banks saw mortgage arrears skyrocket by 96%, with the number of mortgages on their books falling to a six-year low.