With the holidays behind us and a new year ahead, January is a time when many of us are examining our lives and making plans. For some of you a move might be a consideration for 2026. If that’s the case you’re probably wondering if this is a good year to buy and/or sell a property.
In short we say, yes.
However, that yes comes with some qualifications and explanations.
A Reflection on 2025
To understand what likely lies ahead in 2026, it’s important to reflect on what happened in the Canadian real estate market in 2025.
For much of 2025 Buyers and Sellers were closely watching interest rates as they ticked down over the course of the year. While many wanted to make a purchase, they hesitated, waiting on better rates and for that optimal moment when prices would bottom out. Meanwhile, a large percentage of Sellers listed their homes at prices that were achieved only during the peak of the market in 2021/2022.
The gap between so many Buyers and Sellers was, in part, why sales were down for the year and why prices decreased 5% on average.
Success in the Market
The buyers and sellers who were successful last year with their transactions evaluated the reality of where things were at, made thoughtful purchases that reflected current values, and sold their homes with the same clear-eyed understanding of the market (while optimizing their price through careful, professionally guided preparation).
This will be the same recipe needed for success in 2026.
Moving Forward with more Predictability
We closed out 2025 with 4.4 months of supply locally. If you participated in a real estate transaction between 2020 and 2023 you may find this amount of inventory alarming (as during that time we regularly found ourselves in the GTA with less than a month offered). But, in reality, anywhere from 4 to 6 months of supply is considered a Balanced Market, where you will find a more fair and predictable environment for buyers and sellers.
The predicted stability of interest rates this year should also contribute to a more confident buyer pool. Once you know your rate you can start to plan your budget and then take real steps in the process.
Supply and Demand, Rates and the Transfer of Wealth
If you pay close attention to the news you may be experiencing some considerable anxiety over The Tangerine Toddler’s actions and the seeming inability for anyone to rein him in. His ill-conceived tariffs have caused economic uncertainty and lead to an increase in construction costs, thus slowing housing development in Canada. While this is a problem for new builds, some feel it could increase the demand for the resale market and (coupled with other factors) lead to a slight appreciation of prices this year.
It has also been discussed that 2026 could bring a surge of new listings as mortgage renewals come due. We have heard a number of people say they believe the market will be flooded with options as Sellers are unable to hold their homes. Others note that while the rate increases will hurt, we have a careful qualifying process and doubt many will actually end up taking this drastic measure. To further offset the prediction of a huge increase in our housing inventory, CMHC points out that we still have plenty of pent up demand (from the last couple years of Buyer Hesitancy) and a significant housing shortage in Canada.
Overall the Canadian Real Estate Association believes, as we do, that this year will see little change in prices, even if supply increases. This hypothesis is based on the belief that more stable rates, unmet demand for attractive product and a continued transfer of wealth from the Baby Boomers will bolster the market.
While last year we saw a dip year over year in the average price point of homes, we can also observe on a historical graph that real estate values have generally been improving over time.
See the graph provided by CREA below.
Every Situation is Unique
While I have explained a recipe for success in the current real estate market above, that doesn’t mean it makes sense financially for everyone to make a move at this time. If you bought your home anytime between 2021 and today, there is a good chance (with some exceptions of course) that you will not come out ahead by selling. For some people breaking even or a calculated loss will be worthwhile for personal or strategic reasons (i.e you are going to purchase a home that is relatively well priced and makes sense for the next stage of your life), but for many more it will not.
We encourage you to reach out to us directly to speak about your own situation as every case is unique and requires a nuanced discussion of all the details.
All the best to you in 2026 and we look forward to hearing from you.
Erin and Julie
