Canadian Real Estate Market Trends: Cities to Watch (Fall 2026)
Quick answer
Canada's resale market cooled in September 2026: sales fell 2.3% from August and were 7.7% below a year earlier, as fixed mortgage rates jumped and a Bank of Canada rate hike looked likely. The national average price was $666,538, down 1.6% year over year. With 4.9 months of inventory, the market overall is balanced. Ontario and BC prices are still falling, while the Prairies, Quebec and Atlantic Canada are still edging up.
| National indicator (Sept 2026) | Reading |
|---|---|
| Average sale price | $666,538 (−1.6% y/y) |
| MLS® Home Price Index | −0.4% m/m, −3.4% y/y |
| Sales | −2.3% m/m, −7.7% y/y |
| Sales-to-new-listings ratio | 48.8% (balanced) |
| Months of inventory | 4.9 (balanced) |
The Canadian housing market doesn't move as one block. Different provinces and cities are heading in opposite directions at the same time, and in fall 2026 the biggest new factor is borrowing costs. This guide summarizes the latest data from the Canadian Real Estate Association (CREA), where prices are rising and falling, rental conditions for investors, and practical steps for buyers, sellers and renters.
Where the National Market Stands
After four months of modest gains in demand, supply and prices, many markets took a step back in September. CREA linked the pullback to a fresh jump in fixed mortgage rates, with markets pricing in about one percentage point of Bank of Canada rate hikes over the next year.
- Sales are down. National sales fell 2.3% month over month and were 7.7% below September 2025.
- Supply is steady. Just over 200,000 properties were listed at the end of September, up 1.8% from a year earlier and close to the long-term average. New listings fell 1.8% in the month.
- Prices are flat to slightly lower. The MLS® Home Price Index slipped 0.4% in September after four stable months and is 3.4% lower than a year ago. The average sale price of $666,538 is down 1.6%.
- The market is balanced overall. 4.9 months of inventory sits right at the long-term average. CREA treats under 3.6 months as a seller's market and over 6.4 months as a buyer's market.
For buyers, higher rates mean a lower maximum mortgage. They can also mean more listings to choose from and more room to negotiate. Model your own numbers with our Affordability Calculator, since rates can change between pre-approval and offer.
Where Prices Are Rising and Falling
CREA's September price index showed a fresh step down in Ontario, while price gains on the Prairies, in Quebec and on the East Coast continued but slowed. CREA's October 2026 forecast for average prices:
| Province / region | 2026 average price forecast |
|---|---|
| Newfoundland and Labrador | +5.7% |
| Saskatchewan | +5.0% |
| Other provinces (Alberta, Manitoba, Quebec, Maritimes) | Low-to-mid single-digit gains |
| British Columbia | −0.8% |
| Ontario | −3.0% |
| Canada | +0.2% to $681,681 |
- Ontario and BC had the biggest run-ups and remain the weakest markets, with the most room for buyers to negotiate.
- Newfoundland and Labrador and Saskatchewan are supply-constrained and still rising fastest, though CREA expects growth to cool to 3.1% and 2.5% in 2027.
- For 2027, CREA expects national sales to recover 4.4% and the average price to rise 1.2% to $689,909, assuming the Bank of Canada does less than markets fear.
Rents Are Falling in the Biggest Cities
Rents tell a different story from prices. Rentals.ca reported in October 2026 that Canadian asking rents have now fallen for two straight years. September asking rents were $2,741 in Vancouver (−1.3% y/y), $2,164 in Ottawa (−1.2%) and $1,959 in Montreal (−1.1%). In Calgary, unfurnished one-bedroom asking rents were 5.3% lower than a year earlier (liv.rent). For renters this means more choice and more negotiating room. For buyers, it changes the rent-versus-buy math.
Rental Market Conditions for Investors
For anyone weighing a rental property, the vacancy rate matters as much as the purchase price: it shows how quickly units lease and how much pricing power landlords have. CMHC's October 2025 survey shows conditions loosening almost everywhere, with the national purpose-built vacancy rate up to 3.1% from 2.2% a year earlier.
| City | Vacancy rate (Oct 2025) | Average 2-bedroom rent |
|---|---|---|
| Calgary | 4.9% | $1,908 |
| Vancouver | 3.7% | $2,364 |
| Saskatoon | 3.1% | $1,559 |
| Ottawa | 2.9% | $1,916 |
| Montreal | 2.9% | $1,346 |
| Halifax | 2.6% | $1,828 |
- Rising vacancy means less pricing power. Calgary's jump from 1.4% in 2023 to 4.9% came from a wave of new purpose-built rentals; landlords there now compete with incentives.
- Gross yield is only the start. Annual rent divided by purchase price ignores condo fees, property tax, insurance, maintenance and vacancy. Run the full numbers before comparing cities.
- Provincial rules change the math. Rent increases are capped in Ontario (for older units), BC, Nova Scotia and Quebec, but not in Alberta or Saskatchewan. Check each province's tenancy law, and your city's short-term rental rules, before buying.
Population Growth and Housing Demand
Immigration has been the main driver of Canada's population growth, and therefore of rental demand. Since 2024 the federal government has lowered permanent resident targets and capped international student permits, and population growth has slowed sharply as a result.
- Renters: slower growth is one reason vacancy rates rose and asking rents fell in 2025–2026, especially in cities and neighbourhoods that relied on international students.
- Buyers: less pressure on rents also takes some pressure off entry-level condo prices, particularly in Toronto and Vancouver, where investor-owned condos make up much of the rental supply.
- Longer term: newcomers still arrive in large numbers and most rent first, so demand for rentals near transit, jobs and schools stays strong even when overall growth slows.
Practical Steps for Buyers, Sellers, and Renters
- Buyers: get pre-approved now and ask how long the lender will hold your rate. Higher fixed rates reduce how much you can borrow, so confirm your budget at the stress-test rate before you shop.
- Buyers in Ontario and BC: prices are still easing and listings are plentiful. Take time to compare, and negotiate on price and conditions.
- Buyers in Saskatchewan, Newfoundland and Labrador, and much of Alberta and Quebec: supply is tighter and prices are still rising. Expect less room to negotiate.
- Sellers: price for today's market, not last spring's. CREA expects more buyers on the sidelines while rates are uncertain, so an overpriced listing is likely to sit.
- Renters: with rents falling in most big cities, ask for incentives or a lower rent at renewal. If you're weighing a purchase, run your numbers in our Rent vs Buy Calculator, and see our guide to renting vs. buying in Canada.
Frequently Asked Questions About the Canadian Real Estate Market
Are home prices going down in Canada?
Slightly. In September 2026 the national average sale price was $666,538, down 1.6% from a year earlier, and the MLS® Home Price Index was down 3.4%. Ontario and BC prices are falling, while most other provinces are still seeing small gains.
Is it a buyer's or a seller's market in Canada right now?
Nationally, balanced: there were 4.9 months of inventory at the end of September 2026, right at the long-term average. Ontario and BC lean toward buyers, while Saskatchewan and Newfoundland and Labrador remain tighter.
Why did home sales drop in September 2026?
CREA pointed to a jump in fixed mortgage rates and growing expectations of a Bank of Canada rate hike, which pushed some buyers to the sidelines. Sales fell 2.3% from August and were 7.7% below September 2025.
What is CREA's forecast for 2027?
CREA expects national sales to rise 4.4% to 464,235 and the average price to rise 1.2% to $689,909 in 2027, assuming the Bank of Canada raises rates less than markets currently expect.
Which Canadian cities have the highest rental vacancy rates?
Among the cities we track, Calgary had the highest purpose-built vacancy rate in CMHC's October 2025 survey at 4.9%, followed by Vancouver at 3.7%. The national rate was 3.1%, up from 2.2% a year earlier.
How does immigration affect Canadian rents and home prices?
Population growth, driven mostly by immigration, is a major source of rental demand. Lower federal immigration targets and caps on international students since 2024 have slowed that growth, which helped push vacancy rates up and asking rents down in many cities in 2025 and 2026.
Bottom Line
The national market is balanced but nervous: sales are slipping as fixed rates rise, prices are flat to slightly down nationally, and the split between a soft Ontario and BC and a firmer Prairies, Quebec and Atlantic Canada continues. Renters have the most leverage in years. Before deciding to buy or sell, look past national headlines to your own city's inventory, prices and the rate you can actually lock in.
To explore markets outside the largest metros, see our guide to real estate opportunities in smaller Canadian cities.
Sources: CREA monthly statistics release and resale market forecast (October 16, 2026); CMHC Rental Market Survey (October 2025); Rentals.ca National Rent Report (October 7, 2026); liv.rent Calgary rent report (September 2026). Figures are updated when CREA publishes new data; the next release is November 17, 2026.
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