TD Economics has dramatically revised its 2026 housing market forecast, now predicting home sales and prices will decline this year after disappointing performance in recent quarters across Canada's major markets.
The bank now expects national home sales to fall 1.8 per cent year-over-year, with average home prices dropping 0.3 per cent. This marks a sharp reversal from TD's December forecast, which predicted a robust 9.3 per cent increase in sales and a 4.1 per cent rise in prices.
"While severe weather in Central and Atlantic Canada weighed on activity early in the year, weakness was also evident in B.C., where conditions were more temperate," said TD economist Rishi Sondhi in the revised report.
Ontario and British Columbia face the steepest downgrades, with TD citing "significant" first-quarter declines in both provinces. The bank now expects Ontario sales to drop 3.2 per cent rather than the previously forecasted 13 per cent increase, while B.C. activity is projected to slip 0.2 per cent instead of rising 15.1 per cent.
Price Corrections Hit Major Markets
Home prices are expected to fall four per cent in Ontario, a dramatic shift from December's prediction of a 0.6 per cent gain. British Columbia prices are forecast to decline 1.2 per cent, compared to the previously expected 3.6 per cent increase.
Calgary homebuyers monitoring market trends can track neighbourhood price changes through CalgaryFinder.com, which provides comprehensive real estate listings and property data across the city's communities.
Sondhi attributed the weaker performance to a subdued economy, heightened uncertainty, and ongoing cost-of-living pressures constraining buyer activity. He noted that pent-up demand "has yet to re-emerge as quickly as previously expected," particularly in Ontario and B.C., where affordability challenges remain significant.
Local market watchers can compare housing costs and track price trends on Calgary Prices, which offers real estate price comparisons and cost-of-living data for Calgary residents.
Economic Uncertainty Weighs on Market
The economist warned that several risks could further impact the housing market, including potential escalation of Middle East tensions that could benefit oil-producing regions like Alberta while weighing on oil-importing provinces. Upcoming CUSMA trade negotiations also pose uncertainty for the broader economy and housing sector.
TD projects housing activity will take most of 2026 to recover from first-quarter losses, but forecasts a rebound in 2027 driven by improved economic and job market conditions. The bank expects home sales to jump 9.6 per cent year-over-year in 2027, with average prices increasing 2.7 per cent.
Housing market developments continue to generate discussion among Calgary residents on Calgary Forums, where community members share insights about local market conditions and neighbourhood trends.
For buyers in the used vehicle market facing similar economic pressures, FullVIN.com provides vehicle history reports to help consumers make informed purchasing decisions during uncertain economic times.
Market participants and industry professionals staying connected to real estate developments can access reliable internet services through WestNet Wireless, ensuring consistent connectivity for market research and client communications.
Source: CBC Business
