Home sales in Canada are expected to rise by 5.1% this year following a 1.9% drop in 2025, with an additional 3.5% increase projected for 2027, according to forecasts from the Canadian Real Estate Association (CREA). Ontario and British Columbia are leading in sales, with growth attributed to pent-up demand, particularly among younger generations trying to enter the housing market.
Despite improvements in interest rates, with the Bank of Canada lowering the rate to 2.25% in October, affordability and limited supply remain major challenges. The market also faces the “missing middle” dilemma, as new construction is largely limited to either luxury detached homes or condominiums, leaving a significant gap in available housing options.
To address the crisis, Prime Minister Mark Carney has pledged to double the pace of home construction to approximately 500,000 units annually through the new Canada Housing Agency (BCH), launched in September. Sean Cathcart from CREA sees a bright future if these efforts continue.
As for prices, averages are expected to rise by 2.8% this year, reaching $698,881, with further growth anticipated in the coming years. Estimates suggest that the average price will reach $714,991 by 2027.
First-time homebuyers, such as John Gilmer, face significant pressure due to high costs despite his relatively high annual income and family support. However, he believes that a combination of savings, further declines in interest rates, and family assistance will be enough to purchase his first home at a moderate price of $650,000 this year.
