After a slower-than-expected spring market, Canada’s housing sector may be showing early signs of recovery.
According to Royal LePage’s Q2 2026 Home Price Update and Market Forecast, home sales activity has improved in recent months, and market confidence is gradually returning. While most markets across the country continue to favour buyers, the brokerage believes the second half of 2026 could bring increased activity as more purchasers re-enter the market.
Sales Activity Is Improving
The Canadian housing market remains in buyer’s territory, but transaction volume has been strengthening.
Many prospective buyers delayed purchasing decisions over the past two years due to higher borrowing costs, economic uncertainty, and affordability concerns. As financing conditions stabilize and confidence gradually improves, Royal LePage expects more of these buyers to return to the market over the coming months.
Rather than a sudden rebound, the report suggests that Canada is entering a gradual recovery phase.
Detached Homes Are Expected to Recover Faster Than Condominiums
One of the report’s key observations is the growing divergence between property types.
Demand for detached homes is expected to strengthen through the second half of the year as more families and move-up buyers become active again.
The condominium market, however, is expected to remain under pressure. Higher inventory levels, combined with continued investor selling, are likely to keep condo price growth relatively subdued compared to the low-rise segment.
This difference highlights the importance of evaluating each property type independently rather than viewing the housing market as one uniform sector.
Pent-Up Demand Could Increase Competition This Fall
Royal LePage also points to a significant group of buyers who have postponed upgrading over the past two years.
These move-up buyers were not absent because they lacked the desire to purchase. Instead, many chose to wait for improved market conditions and greater financial certainty.
If inventory continues to decline while these buyers return, competition for well-priced detached homes could intensify during the fall market.
Mortgage Renewals Will Continue to Influence the Market
Another important factor is the wave of mortgage renewals still ahead.
Royal LePage notes that the majority of fixed-rate mortgages secured during the historically low interest rate environment are expected to complete renewal by the end of 2027.
As homeowners gradually transition from pandemic-era borrowing costs to today’s higher interest rate environment, housing decisions—including whether to move, upgrade, downsize, or sell—may continue to shape market activity over the next 18 months.
GTA Forecast: Outlook Improves Despite Expected Annual Price Decline
For the Greater Toronto Area, Royal LePage has revised its outlook to become more optimistic than its previous forecast.
The brokerage now expects the aggregate home price in the GTA to be approximately 2% lower year-over-year in the fourth quarter of 2026.
Although this still represents a modest annual decline, it reflects an improved outlook compared with earlier expectations, largely because market activity has recovered more quickly than anticipated.
What This Means for Buyers and Sellers
Today’s market continues to offer opportunities for both buyers and sellers—but success depends more than ever on strategy.
For buyers, inventory remains relatively healthy, providing greater negotiating power and more time to evaluate options.
For sellers, achieving a successful outcome is increasingly dependent on accurate pricing, effective marketing, and strong negotiation rather than relying on overall market momentum.
As the market becomes more balanced, pricing strategy and property positioning are likely to have a greater impact on results than broad market trends alone.
Rather than asking whether the market is simply “up” or “down,” buyers and sellers should pay closer attention to how individual property types, neighbourhoods, and local supply conditions are evolving. Those differences are expected to become even more significant as Canada moves through the remainder of 2026.
