CREA Cuts Its 2026 Home Sales Forecast for the Third Time: What Buyers and Sellers in Ontario Should Know

What CREA changed

The Canadian Real Estate Association has lowered its forecast for home sales for the third straight quarter, and the reason it gives is the cost of borrowing.

In its quarterly forecast, published this month, CREA now expects 444,530 residential properties to trade through Canadian MLS® Systems in 2026, a 5.2% decline from 2025. According to Canadian Mortgage Trends, carrying a Canadian Press report, that compares with a July forecast of a 1.4% decline, an April forecast of a 1% gain and a January forecast of 5.1% growth. The direction of travel across the year is the story.

On prices, the association expects the national average to edge higher by just 0.2% on the year to $681,681. That is slightly lower than its July forecast but, in CREA’s words, largely unchanged. The national figure hides a split: a 3% dip in Ontario and 0.8% in British Columbia, offset by continued but slowing gains in other provinces, with Newfoundland and Labrador (+5.7%) and Saskatchewan (+5%) strongest.

Why it was cut

CREA describes 2026 as another “roller-coaster” year, this time driven by on-again, off-again inflation risks from a global energy crisis and the effect on borrowing costs. Fixed mortgage pricing jumped in the spring, cooled over the summer and then moved higher again from early September as oil prices rose and the Bank of Canada took what CREA calls a notably more hawkish tone.

The association says markets are pricing roughly 100 basis points of Bank of Canada increases by this time next year, and that the shift in fixed-mortgage affordability, together with uncertainty about variable costs, has already shown up as lower sales in September. According to the same Canadian Press report, national sales that month were down 7.7% from a year earlier and 2.3% from August, and the national average sale price was $666,538, down 1.6% on the year.

The downward revisions were spread evenly across provinces, with the exception of Newfoundland and Labrador, where the market is still very active. We look at what this does to a purchase budget in our piece on GTA buyers hesitating as borrowing costs climb.

Ontario’s share of the picture

Ontario is where the forecast is softest. CREA’s 3% projected dip in the provincial average price is the largest of any province it names, and TD economist Rishi Sondhi, quoted in the Canadian Press report, expects weak price growth across most regions in 2027, with loose supply-and-demand balances providing an additional drag in British Columbia and Ontario.

Two cautions apply. First, an average price is not a benchmark for any one home: it moves with the mix of what sells, and it says little about a particular street or building. Second, a province-wide figure blends very different markets. Our own look at Waterloo Region in September and the London and St. Thomas market shows how far local conditions can sit from the provincial headline.

A standoff between buyers and sellers

The Canadian Press report quotes Marco Pedri, a broker with Shoreline Realty, describing a fall market that was significantly shorter than usual. In his view, many buyers acted over the summer or in the first weeks of fall to lock in terms they found favourable, leaving remaining sellers waiting. “It’s honestly a game of chicken,” he said, adding that he expects buyers to look for better deals in January through March, when sellers whose homes have sat on the market may be readier to move.

That is one broker’s read of one market, not a forecast we can stand behind. It is useful because it names the dynamic: when borrowing costs rise, both sides wait, and the number of sales falls before the price does.

What the 2027 outlook assumes

CREA expects national sales to improve 4.4% to 464,235 homes in 2027, and the average price to rise 1.2% to $689,909. It is explicit about the conditions behind that: slow but positive economic growth, a return to higher population growth, and more certainty for borrowers about the path of interest costs. It also notes that its forecast assumes limited action by the Bank of Canada over the next year, and that the consensus of forecasts leans toward fewer increases than markets are currently pricing.

The Bank next announces its decision on 28 October, alongside its Monetary Policy Report. Every number above could move with it, which is a reason to treat a forecast as context and not as a plan.

What to do with a forecast like this

• Start with your own payment. A buyer’s decision turns on what a monthly payment looks like at today’s terms and at a higher setting. Test both in our mortgage calculators.
• Know where you qualify. Lenders apply the stress test whatever the market does. A pre-qualification shows your position under current rules, subject to final lender terms.
• Sellers who are also buyers should plan the two moves together. Timing, bridging and porting all matter more in a slower market. Our Next Home Hub walks through them.
• First-time buyers should check the programs, not just the headline. The First Home Hub sets out down payment rules and municipal assistance that do not move with a monthly sales report.