Canada’s Market Reset Amid Global Shifts

Modest Price Growth and Market Reset

According to the latest Royal LePage housing forecast, Canada’s national average home price is expected to increase modestly around 1.0 % year-over-year by Q4 2026, reaching roughly C$823,000. Detached homes are forecast to see slight gains (about 2.0 %) while condominiums may edge lower by 2.5 %, reflecting continued affordability pressures in urban cores. Quebec City is projected to lead major markets with a notable 12 % increase in aggregate prices, while Toronto and Vancouver may see slight declines in aggregate values as demand continues migrating outward.

Housing affordability, which has been Canada’s headline real estate challenge for several years, appears to be easing gently, inviting first-time buyers back into the market. Lower borrowing costs, expanded supply, and reduced competition are cited as key factors helping to coax buyers off the sidelines in 2026.

Rental Sector Strength Amid Shifting Demand

Even as ownership markets adjust, Canada’s rental sector remains robust and a core focus for investors and developers alike. A standout trend for 2026 is the pivot from condos, many of which face an inventory glut, toward purpose-built rental housing. Industry reports indicate that rental apartment construction is at its highest in decades, spurred by demographic demand, immigration inflows, and government incentives tied to housing affordability.

This shift reflects both supply and demand realities: while elevated development costs have left some rental units vacant due to higher asking rents, policy support and new financing models are encouraging builders to prioritize long-term rental stock.

Regional Winners: Calgary and Mid-Sized Markets in Focus

Regional performance varies sharply. Calgary is emerging as a standout property market in Canada for 2026, buoyed by strong population gains, robust job creation, and agile city-level policy frameworks that support accelerated housing delivery. PwC Canada’s Emerging Trends report identifies Calgary as the top Canadian market prospect for the year, followed by other vibrant centers such as Toronto and Edmonton.

Smaller urban centers, including Halifax, Moncton, Saskatoon, and others, are also rising in prominence, offering above-average rental yields, lower vacancy rates, and attractive investment profiles compared with overheated major markets.

Capital Flows & Institutional Investment Trends

Canadian real estate continues to draw global capital seeking stable income streams. Institutional investors have increased allocations to multifamily rental, retail centers anchored by essential services, and industrial logistics properties, areas seen as resilient across economic cycles. Pension funds, private REITs, and strategic partnerships are becoming increasingly active, diversifying the investor base and increasing liquidity in the market.

Global Backdrop: Positive Signals Despite Uncertainty

On the broader global stage, property markets are showing signs of recovery and strategic recalibration. Global real estate outlooks point to improving fundamentals in 2026, driven by economic growth in key regions and renewed investor confidence in sectors like short-term rentals and commercial property niches.

Yet luxury segments continue to outperform expectations, especially in premium U.S. markets, underscoring the ongoing bifurcation between high-net-worth asset classes and broader residential markets facing affordability headwinds.

What’s Next for Buyers and Renters

As Canada’s housing market resets, buyers may find improving affordability and regional opportunities, particularly outside the most expensive urban cores. Renters, meanwhile, will likely benefit from expanded purpose-built rental options and more balanced pricing trends as inventory normalizes.

From an investor perspective, multifamily assets, rental apartments, and strategically located mid-sized city markets are among the most compelling real estate themes for 2026 blending stable demand with the potential for sustainable returns.