Canada's Housing Recovery Is Coming — But Don't Expect a Boom

What RBC's Latest Forecast Means for Buyers and Sellers in 2026-2027

If you've been waiting for a sign that the Canadian housing market is turning a corner, RBC Economics just gave you one — with a big caveat. In its mid-year housing outlook, RBC says the recovery has already begun, but it arrived too late to stop home sales and prices from slipping further in 2026. The good news: 2027 is shaping up to be a meaningfully better year, especially here in Ontario.

Here's a breakdown of what the numbers actually say, and what it means if you're thinking about buying, selling, or just watching the market from the sidelines.

The Big Picture: A Slow, Uneven Turnaround

RBC assistant chief economist Robert Hogue described the path forward best: recovery will move in "two steps forward followed by a step back," with different regions improving and slipping at different times. This isn't a market that's about to snap back to pre-pandemic highs — it's one that's stabilizing gradually, market by market.

Since April, home resales have been improving, inventory has leveled off, and price declines have started to slow. But RBC is clear that this momentum builds through 2026 rather than delivering an immediate rebound.

The Numbers: 2026 Dip, 2027 Rebound

RBC's national forecast shows a market that gets worse before it gets better:

• 2026: Home resales are forecast to fall 3.6% to 453,200 units, while the national benchmark price is expected to decline 2.3% to $794,200.

• 2027: Sales are projected to rebound 6.7% to 483,600 units, with the benchmark price edging up 0.8% to $800,700.

Even with that rebound, RBC notes sales will remain well below pre-pandemic levels, and home values will sit only slightly above their cyclical low point. This is a recovery in the technical sense, not a return to the frenzied markets of 2021-2022.

(Chart: National Home Resales and Benchmark Price, 2026 vs. 2027 — see attached graphic)

Where Is the Demand Coming From?

This is the part of the report that should catch every agent's attention. RBC estimates that more than 400,000 Canadian households may not have formed since 2019 — meaning hundreds of thousands of would-be buyers have simply put their plans on hold as ownership costs climbed. That includes renters staying put longer than they wanted to, and homeowners delaying upsizing or downsizing moves.

That's a massive pool of pent-up demand. And there are reasons to believe some of it is ready to move:

• Canadians are saving at a rate near a 25-year high.

• Employment among people aged 25 to 34 is currently above its historical average.

• RBC expects this pent-up demand to outweigh the drag from slower population growth and reduced immigration targets.

In short, the buyers are out there. They're just waiting for the right combination of confidence and affordability to jump back in.

Interest Rates: This Is Likely as Good as It Gets

If you or your clients have been hoping rates fall further, RBC's message is blunt: don't count on it. "We believe they are as low as they will get this cycle," Hogue wrote. RBC expects the Bank of Canada to hold its policy rate through the end of 2026, then start raising it again in 2027, with long-term rates drifting modestly higher through the end of that year.

For anyone sitting on the fence waiting for a better rate environment, this is a signal worth sharing: the rate backdrop we have right now may be the best it gets this cycle.

Ontario and B.C.: Leading the Recovery

This is the most relevant piece for our local market. RBC forecasts that Ontario and British Columbia will post some of the strongest sales growth in the country in 2027, as improving affordability draws sidelined buyers back in.

• Ontario: Sales are forecast to decline 0.5% in 2026, then rise 8.2% in 2027. Home values are expected to increase 0.7% in 2027.

• B.C.: Sales are forecast to fall 4.6% in 2026, then climb 7.8% in 2027. Home values are expected to rise 0.5% in 2027.

(Chart: 2027 Sales Growth Forecast — Ontario, B.C., Alberta — see attached graphic)

One caveat worth flagging for condo owners and investors: RBC expects the condo segment to lag. High inventory levels in the Toronto and Vancouver regions, combined with soft investor demand, could keep condo prices under pressure into 2027.

Other Markets: Cooling From Strength

Not every province follows the same script. Markets that held up relatively well through the downturn — think Saskatchewan, Manitoba, and Atlantic Canada — are expected to see price growth slow in 2027 as population growth eases and inventory builds:

• Saskatchewan: 2.5%

• Manitoba: 1.9%

• Newfoundland and Labrador: 1.3%

• Quebec: 1.2%

• Nova Scotia: 1.1%

• New Brunswick: 0.9%

• Prince Edward Island: 0.3%

Alberta is the outlier among the "hot" markets, expected to stay relatively strong with 7.1% sales growth and a 1.8% increase in home values in 2027.

(Chart: 2027 Price Growth Forecast — Resilient Markets — see attached graphic)

Risks That Could Derail the Timeline

RBC isn't pretending this forecast is bulletproof. The bank flagged several risks that could push the recovery further out:

• Renewed trade tensions with the United States

• Geopolitical conflict

• Deeper-than-expected effects from immigration cuts

• Persistent affordability challenges that keep buyers on the sidelines

It's also worth remembering this market has already seen four false starts since 2023 — periods of improvement interrupted by outside shocks. RBC's own economists are cautious about calling this the definitive turning point.

What This Means for You

If you're a buyer who has been waiting for rates to drop further, RBC's outlook suggests the current rate environment may be close to the best you'll see this cycle — which shifts the calculus toward acting sooner rather than later once you're financially ready.

If you're a seller, patience matters. Ontario's rebound is expected to build through 2027, not arrive overnight, so pricing realistically today and positioning for improving conditions next year is a more reliable strategy than waiting for a sudden turnaround.

If you're an investor eyeing the condo market, RBC's caution about elevated inventory and soft demand in Toronto is a signal to look closely at fundamentals in any specific building or neighbourhood before assuming the broader recovery applies evenly across all property types.

As always, national and provincial forecasts are a starting point — not a substitute for a conversation about your specific neighbourhood, price point, and timeline. If you'd like to talk through what this means for your plans, reach out anytime.

Source: RBC Economics mid-year housing outlook, as reported by Real Estate Magazine (REM), September 2026.