‘Buyer-friendly’ housing prices expected in 2026 in Ontario: report

The Canadian housing market closed out 2025 with a slight decline, and forecasts predict more price drops in parts of Ontario.

According to the Royal LePage House Price Survey and Market Forecast released on Thursday, the aggregate price of a home in Canada decreased 1.5 per cent year-over-year to $807,200 in the fourth quarter of 2025.

On a quarter-over-quarter basis, the national aggregate home price posted a similar decline of 1.1 per cent, the forecast report noted.

“Economic uncertainty – driven by trade disputes and broader geopolitical tensions – has weighed on consumer confidence and muted what is typically a more active fall market,” said Phil Soper, president and CEO, Royal LePage. “Instead of a fall seasonal surge, we saw a quieter close to the year.”

With some of the most expensive housing prices in Canada, the Greater Toronto Area saw bigger price drops.

The aggregate price of a home in the GTA decreased 5.7 per cent year-over-year to $1,084,300 in the fourth quarter of 2025. On a quarterly basis, the aggregate price of a home in the GTA also declined 2.7 per cent, the report stated.

Vancouver saw aggregate home prices fall 4.1 per cent year over year in the fourth quarter.

“At long last, home values across Canada are beginning to compress,” said Soper. “For years, price growth in Toronto and Vancouver far outpaced the rest of the country, but our two most expensive metro markets have experienced gradual price declines for four years now, while other major cities saw steady, modest appreciation and are closing the gap.”

Soper added that as affordability improves in southern Ontario and British Columbia’s Lower Mainland, households are less likely to feel pressured to relocate purely on housing costs, potentially tempering the interprovincial migration patterns that intensified during the pandemic.

Broken out by housing type in the GTA, the median price of a single-family detached home decreased 4.4 per cent year over year to $1,364,300 in the fourth quarter of 2025, while the median price of a condominium decreased 8.2 per cent to $656,000 during the same period.

“Toronto did not experience the anticipated pickup in activity during the final months of 2025, despite an interest rate cut in October,” said Shawn Zigelstein, broker and leader of Team Zold, Royal LePage Your Community Realty. “December, in particular, remained notably sluggish, with sales falling by double digits compared to typical seasonal levels.”

Zigelstein noted that Toronto’s condominium market remains under downward pressure, driven by elevated inventory levels and a temporary retreat from investors. Pre-construction activity continues to stagnate, with new project launches limited as developers adopt a cautious stance in response to softer market conditions.

In 2026, the spring market is expected to bring a renewed sense of momentum, though not the sharp surge in activity seen in past cycles, the report noted.

“The conditions are in place for a more active spring market in 2026. Interest rates are no longer a barrier to home ownership, inventory levels are healthy, and economic indicators continue to point to moderate growth in both GDP and employment,” said Soper.

But Soper said consumer confidence continues to influence buyers.

“Greater clarity on trade relations with the United States would certainly help, but there’s also a more subtle shift underway,” Soper said. “After a full year of economic and political turbulence, more and more households have given up waiting for perfect certainty and are refocusing on what is happening at home, and what matters most: securing the right housing for their families. As that adjustment takes hold, we expect it to gradually translate into increased market participation.”

Prices are expected to remain down in the Greater Toronto Area.

“The market is expected to remain buyer-friendly in early 2026 and into the spring, supported by rising inventory levels and continued price softness. As interest rates settle near their floor and confidence begins to improve, market activity should gradually increase, helping to move conditions toward a more balanced state,” said Zigelstein. “Prices are expected to stabilize rather than soar, as increased supply levels will continue to keep a lid on price appreciation, even as demand slowly returns.”

Royal LePage is forecasting that the aggregate price of a home in the Greater Toronto Area will decrease 4.5 per cent in the fourth quarter of 2026, compared to the same quarter last year.

See Royal LePage’s full report here.