Forecasters can't agree on where prices are headed
Royal Bank of Canada (RBC) Economics is characterizing August's housing slowdown as a pause, not a turning point, even after home resales fell 0.7% month-over-month and trade tensions rattled buyer confidence.
The assessment arrives alongside a wider divergence among Canada's housing forecasters over how 2026 will ultimately play out, with the Canadian Real Estate Association (CREA) and TD Economics now landing on notably different outlooks for the year.
Reading the pause, not the plunge
Rachel Battaglia, economist at RBC, said the escalation in trade tensions last month made economic uncertainty tangible again after several months of adjustment.
RBC expects stabilization to take hold over the second half of 2026 and into 2027, though the recovery is expected to vary by region.
Read more: Canada home resales post strongest monthly gain in 18 months
The August pause follows a spring rebound that RBC itself flagged as fragile. In May 2026, Battaglia reported resales climbing 5.5% month-over-month, the strongest single-month gain in a year and a half, with Ontario resales up 8.8% and the sales-to-new-listings ratio reaching 49.2%, its highest reading of the year at that point.
She cautioned then that labour market conditions, geopolitical tensions, and tariff policy would determine the second half of 2026, a warning that August's data appears to bear out.
August by the numbers
National home resales declined 0.7% month-over-month on a seasonally adjusted basis, retreating to levels last seen in May. New listings grew 3.3% month-over-month, pushing the sales-to-new-listings ratio down to 49%, still within balanced territory.
CREA's composite price measure was little changed from July. Year-over-year price declines slowed to -3.0%, continuing a trend of deceleration in place since January.
Forecasters are no longer telling the same story
CREA's own 2026 outlook has moved considerably since the year began. In January, the association projected 494,512 sales for 2026, a 5.1% increase over 2025, alongside a 2.8% rise in the national average price to $698,881. By July, that call had been revised down to 463,336 sales, a 1.4% decline from 2025, with the average price forecast trimmed to a 1.1% gain, or $686,710.
CREA attributed the revision to a slower-than-expected start to the year and a sharper population growth slowdown affecting Quebec and the East Coast in particular, with Ontario now the only province forecast to post an annual sales increase.
Read more: This province is quietly outpacing Canada's housing market
TD Economics has taken a more cautious position. Its provincial outlook, released July 3, held its national average price forecast unchanged at a 0.3% annual dip for 2026, while trimming its sales growth outlook further following a weaker-than-expected first quarter, a downgrade from the 1.8% sales decline the bank had projected back in March.
TD's report also found Alberta prices up just 2.5% year-to-date, a gain the bank attributed to elevated resale supply and a normalization from the 2023–2025 period, consistent with the regional softness RBC recorded in Calgary and Edmonton in August.
The gap between CREA's and TD's positions, while narrower than it was in January, leaves brokers working from genuinely different professional guidance on how active the remainder of 2026 is likely to be.
The case for a detour
Vancouver, among the country's softer markets, saw resales edge up 9.7% month-over-month in August, crossing the 2,000-unit mark for the first time in nine months. Prices there continued to decline, though at a slower pace, with the MLS Home Price Index down 5.6% year-over-year.
Toronto home prices edged 0.1% lower month-over-month in August, following two consecutive monthly increases in June and July after a decline that persisted for most of the prior year.
Ottawa recorded a turn in its MLS Home Price Index, with annual growth reaching 1.0% in August, its first positive reading in 2026, though RBC noted this could still see volatility before annual price changes are firmly established on positive ground.
Read more: Canada's spring housing season off to a mixed start, RBC says
This city-by-city split is not new. RBC's Robert Hogue reported similar divergence in March 2026, when resale activity rose in Toronto, Hamilton, Saskatoon, and Regina but fell in Vancouver, the Fraser Valley, Calgary, and Edmonton, citing the same trade war and affordability concerns RBC pointed to in August. The pattern has held for roughly six months rather than emerging suddenly in the latest data.
Cities that lost ground
Calgary resales fell 3.4% month-over-month and 11.0% year-over-year, while its price index slipped 0.3% year-over-year.
Edmonton resales rose a modest 0.5% month-over-month but remained down 10.8% year-over-year.
Ottawa's resale count told a different story than its price index: resales there dropped 11.2% month-over-month and 19.3% year-over-year, the steepest decline among the cities tracked.
Toronto and Montreal posted year-over-year resale declines of 2.1% and 13.1%, respectively, while prices remained below year-ago levels across most of Ontario and British Columbia.
The regional split carries direct implications for the volume of mortgage renewals working through the system this year. The Bank of Canada estimates that roughly 60% of outstanding mortgages are renewing across 2025 and 2026 combined, with those resetting in 2026 facing an average payment increase of about 6%, rising to 15–20% for borrowers on five-year fixed terms taken out in 2020 and 2021 near record-low rates.
Softer resale and price conditions in Calgary and Edmonton, where equity growth has been limited, could make those renewal conversations harder for clients with less room to absorb higher payments than counterparts in markets like Ottawa or Montreal.
New listings remain below year-ago levels nationally, which RBC said has helped stabilize inventory and rebalance supply and demand. Borrowing costs are unlikely to change the calculus in the near term.
Read more: Bank of Canada announces latest interst rate decision
The Bank of Canada held its policy rate at 2.25% for a fifth consecutive time in June 2026, extending a hold that began in December 2025. That streak continued through the Bank's September decision, even as second-quarter GDP grew 3.3% and inflation climbed to 3.0% in July. Some economists have since raised the possibility of a rate hike before year-end, a scenario that would add a further variable to the regional recovery RBC is currently describing as a pause rather than a reversal.
