2025 FALL OUTLOOK REPORT

As 2025 winds down, Canada’s housing market is navigating one of the most balanced landscapes we’ve seen in years. Prices are softening in many parts of the country & inventory levels are climbing.

Buyers, especially first-time buyers, are finding opportunities that simply didn’t exist during the peak of the market. But affordability remains a challenge, and the road into 2026 will continue to test households, sellers, and investors alike.

Here’s what you can expect as we wrap up 2025 and head into the new year.

The National Picture

Across Canada, home prices are projected to decline between 1–3% in 2025. According to RBC Economics, national resales are expected to pull back 3.5% this year, with a modest recovery forecasted in 2026. The Canada Mortgage and Housing Corporation (CMHC) predicts similar outcomes, with larger price corrections in Ontario and British Columbia, followed by stabilization in 2026.

Oxford Economics goes further, suggesting peak-to-trough corrections of up to 8–10% in markets like Toronto and Vancouver, underscoring just how much affordability pressures and high inventory are weighing on urban markets.

Ontario & the GTA

Ontario continues to be a province where corrections are most pronounced. By mid-2025, the average home price was about $852,000, down 3.7% year-over-year. The Greater Toronto Area (GTA) has seen sharper drops, with average prices falling 3.5% in Toronto proper and over 5% across the wider GTA. Condos are particularly under pressure, with high supply and reduced investor appetite making this segment a haggard heading into 2026.

Still, the Toronto Regional Real Estate Board (TRREB) projects a slight recovery in sales through late 2025 and into 2026, with more stable conditions expected if interest rate cuts materialize.

Hamilton and Niagara

Southern Ontario markets like Hamilton and Niagara are also experiencing softening, though the declines are not as steep as in the GTA. Hamilton’s average home prices were down about 1.1% year-over-year as of mid-2025, keeping it firmly in buyer’s market territory.

The Niagara Region, while also slowing, has shown resilience. The benchmark price for a detached home sat around $656,400 in Q2 2025, significantly more affordable than Toronto’s $1.1 million-plus averages. Sales are steady, and in some cases, well-priced listings are moving quickly. Some forecasts suggest modest 2% price growth in Niagara for 2025, with sales increasing by about 4%.

Why This Market Favours Buyers

For the first time in a long time, buyers, especially first-time buyers, are finding conditions tilted in their favour!

Elevated listings, longer days on market, and price reductions are creating opportunities to enter the market without the frenzied competition that defined the pandemic years. 

Importantly, first-time buyers who don’t face the challenge of selling a current home are at an advantage, as they can take their time, negotiate effectively, and benefit from softer prices.

That said, affordability is still far from solved. Even with prices dipping, the average Canadian home price is expected to hover near $677,000 in 2025. For many young buyers, saving for a down payment remains daunting, and elevated borrowing costs continue to squeeze budgets.

What to Expect in 2026

Heading into 2026, most forecasts call for stabilization, not another boom. RBC projects a rebound in resales of nearly 8%, but only a slight decline in national average prices (−0.7%) as affordability issues persist. TD Economics anticipates that after a 3.2% dip in 2025, prices will rise by about 1.5% in 2026.

Key drivers to watch will include:

• Interest Rates: Potential rate cuts late in 2025 or early 2026 could stimulate demand.
• Housing Supply: Elevated listings and new completions, especially in the condo sector, may keep prices contained.
• Economic Conditions: Trade stability and job growth will be critical to confidence in the housing sector.

Final Thoughts

The next 3–6 months will continue to favor buyers, offering more negotiating power and less competition. For first-time buyers, this represents one of the best windows to enter the market in recent years. However, affordability challenges are not going away anytime soon. Prices, even as they soften, remain high relative to incomes, and younger Canadians will still struggle to make the numbers work.

Looking to 2026, modest improvements in affordability may come from rate cuts and slower price growth, but a full return to accessibility remains a long-term challenge. In the meantime, those who are prepared, especially first-time buyers without the burden of selling, are in the best position to take advantage of today’s shifting market.

Does it sound like you could benefit from this ever-changing market? Maybe this is your time. Reach out to any member of the Portfolio Realty Group and make your move!