Royal LePage Forecasts Home-Price Increase in 2026

Royal LePage’s newest 2026 Housing Market Outlook is signalling a subtle but important shift in Canada’s real estate landscape. After almost two years of slower activity, falling prices in some cities, and persistent affordability concerns, the brokerage now forecasts a national home-price increase, projecting the average to reach C$823,016 by the end of 2026.

For mortgage borrowers, first-time buyers, and homeowners preparing for renewals, this report matters. A stabilizing market changes how lenders assess risk, how borrowers plan budgets, and how quickly affordability bands shift.

This deep-dive explains what is driving the forecast, who benefits, and how Canadians should plan their 2026 mortgage decisions.

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1) What’s Behind the Expected Price Increase?

• Pent-up demand returning after a slow 2024–2025

Many buyers paused purchases due to rate uncertainty. As borrowing conditions stabilize and the economy avoids deeper downturns, a segment of buyers is preparing to re-enter the market.

Why it matters:
Even a mild return of demand can push prices up in markets where inventory remains limited.

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• Chronic inventory shortages in major cities

Toronto, Vancouver, and Montreal continue to face low listing volumes. Even when buyers are cautious, tight supply can create upward pressure on prices.

Example:
A neighbourhood with only 6–10 active listings can still trigger competition if even modest buyer activity returns.

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• Increased consumer confidence heading into 2026

Stable employment conditions and improving economic sentiment are gradually restoring buyer confidence. Royal LePage notes that “market fatigue” is fading — buyers are adjusting to the new normal for rates.

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2) What This Means for First-Time Buyers

• A rising-price market increases savings pressure

Price growth—even modest—raises down-payment requirements.
For example, a C$750,000 starter home increasing by 3% next year adds more than C$22,000 to the purchase price.

• Rate holds and pre-approvals become more important

A 120-day rate hold offers protection for buyers planning an early-2026 purchase. If fixed rates rise slightly while prices climb, affordability can shift quickly.

• Expect more competition in entry-level homes

Royal LePage warns that lower-priced units—condos and townhomes—may see the earliest signs of a recovery.

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3) What This Means for Current Homeowners

• Home equity is likely to grow in 2026

A 2–4% rise in market value improves refinancing options.
Homeowners looking to consolidate debt, renovate, or adjust amortization terms may have better leverage.

• Renewals may become easier to negotiate

If values rise while rates stabilize, lenders may show more flexibility on renewal terms—especially for strong-credit borrowers.

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4) Regional Notes From the Forecast

• Toronto & Vancouver:

Expect moderate growth, constrained heavily by inventory.

• Calgary & Edmonton:

Stronger growth likely continues, driven by affordability and inter-provincial migration.

• Montreal:

Stable movement with slight gains, supported by steady employment and balanced supply.

• Atlantic Canada:

Mixed patterns; some markets remain affordability leaders.

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5) Risks That Could Change the Forecast

• Population growth slows

Immigration has been the strongest driver of housing demand. Any adjustment could soften price pressure.

• Premature BoC rate hikes

If inflation resurfaces, borrowing could become more expensive, impacting demand.

• New construction surges

If supply improves more quickly than expected, the forecast could shift downward.

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Royal LePage’s expectations signal modest, steady recovery—not a boom.
For borrowers, that means:

• A more predictable environment
• Better planning conditions for 2026
• Increased urgency for those waiting to enter the market

The shift toward price stability suggests that 2026 may reward proactive buyers and homeowners who plan early.

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