CMHC Housing Market Outlook for 2026

On Tuesday, the Canada Mortgage and Housing Corporation (CMHC) released its Housing Market Outlook for 2026, projecting slow economic growth and continued headwinds for Canada’s housing sector.

CMHC said real GDP is expected to rise just 0.7% in 2026, making it one of the weakest years in recent decades outside of a recession. While a recession is not included in the baseline forecast, CMHC cautioned that geopolitical and economic uncertainty leaves the risk of a broader slowdown over the forecast horizon.

Trade conditions remain a key drag on the outlook. US tariffs introduced in 2025 are expected to continue raising costs for Canadian exporters, keeping businesses cautious and weighing on investment. Exports are forecast to decline again in 2026, although less sharply than in 2025, with a gradual recovery anticipated in 2027 as firms adapt and diversify markets. CMHC assumes current tariffs and trade uncertainty persist throughout the forecast period, with added risk tied to the timing of the USMCA review alongside US midterm elections.

From a housing perspective, CMHC said demand is expected to gradually gain momentum, although home sales are projected to remain below historical averages and price growth to be modest following declines in 2025. New-home construction is forecast to fall through 2028 as developers contend with high costs, softer demand, and rising inventories of unsold homes. Condominium starts are expected to be particularly weak, while rental construction will continue to add supply but at a slowing pace.

Rental markets are moving toward balance at the national level as new supply eases pressure and rent growth moderates, giving renters more flexibility before transitioning to homeownership.

Regional outcomes will vary significantly. CMHC expects construction and home sales in Ontario and British Columbia to remain below their 10-year averages, while activity in the Prairies and Quebec stays above historical norms. Ontario is the only region projected to see home price declines in 2026.