After a historically weak 2025, resale markets in Vancouver and Victoria are expected to show some recovery in 2026, but the rebound will likely stay below long-term averages. For anyone trying to buy a house in Canada right now, that means a market that feels stuck between recovery and uncertainty — lower mortgage rates are helping, but a weaker labour market and high inventory are keeping prices from climbing back to pre-pandemic peaks. Here’s what you actually need to know.
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This article is general information only and does not constitute professional advice. For your specific situation, consult a qualified professional.
The CMHC’s Housing Market Outlook for 2026 shows a market that’s recovering, but not roaring back. Resale activity across Canada is expected to remain below long-term averages, and housing starts will continue to slow through 2026, with a more significant decline expected in 2027–2028. That matters because less new construction means less supply coming online just as demand might pick up. In British Columbia, the labour market is expected to recover in 2026 after limited growth in 2025, but demographic factors — like slower international migration — will weigh on housing markets. If you’re looking at how government policies are shaping the future of real estate in Canada, this is the backdrop those policies are working against.
One term you’ll hear a lot in this market is housing starts — the number of new residential construction projects that begin in a given period. When housing starts slow down, it means fewer new homes will be available in the future, which can eventually push prices back up if demand recovers faster than supply.
What the full cost picture looks like for buyers in 2026
Buying a house isn’t just about the purchase price. In this market, the total transaction costs can shift the real figure by tens of thousands of dollars. The table below breaks down what you’re actually paying beyond the sticker price.
→ Scroll right to see all columns
| Cost Component | Typical Range | Who Pays |
|---|---|---|
| Purchase price | Varies by region | Buyer |
| Mortgage rate (current) | Lower than 2024, but uncertainty ahead | Buyer |
| Legal fees & disbursements | $1,000–$2,500 | Buyer |
| Home inspection | $400–$800 | Buyer |
| Property transfer tax (BC) | 1% on first $200k, 2% on remainder | Buyer |
| Mortgage default insurance | 2.8%–4% of loan if down payment <20% | Buyer |
| Moving costs | $500–$3,000 | Buyer |
What I tend to notice is that buyers focus on the mortgage rate and forget about the property transfer tax. In BC, that tax applies on the full purchase price above $200,000 — so on a $600,000 home, you’re paying $10,000 in tax alone. That’s real money that doesn’t go toward your equity. Worth weighing against the lower mortgage rates you might be getting.
Where buyers and sellers get this market wrong
Assuming lower mortgage rates mean an easy buy
Mortgage rates have come down from their 2024 highs, but that alone hasn’t triggered a buying frenzy. CMHC data shows that despite lower rates in 2025, a weaker labour market and ongoing economic uncertainty kept resales slow. Lower rates don’t help if you’re worried about your job or if prices haven’t dropped enough to make the monthly payment affordable. The full picture includes employment stability, not just the rate on your pre-approval.
Thinking high inventory means prices will crash
Elevated inventory does give buyers negotiating leverage, but CMHC expects price growth to stay muted, not negative. Prices will likely remain below pre-pandemic peaks in most regions, but that’s not the same as a crash. Sellers who bought before 2020 still have equity, and many can afford to wait rather than sell at a loss. If you’re waiting for a 20% drop, you might be waiting a long time.
Believing new construction will solve the supply problem soon
Condominium presales in Vancouver and Victoria have stalled, and CMHC expects more projects to be postponed or cancelled in 2026, with effects extending into 2027 and 2028. Builders are facing high material and regulatory costs, weaker rent growth, and slower absorptions. The new supply that was supposed to ease prices isn’t coming as fast as planned. If you’re banking on a flood of new condos driving prices down in the next year, the data doesn’t support that.
Ignoring the rental market shift
Rental affordability is improving — higher vacancies and slower rent growth mean tenants have more options. But that also means investors are less interested in buying rental properties. Fewer investor purchases reduce competition for entry-level homes, which could help first-time buyers. But it also means fewer new rental buildings get built, which could push rents back up in a few years. The rental market and the for-sale market are connected in ways most buyers don’t consider.
How to read the market and make a decision that fits your situation
Understanding the regional split
Not all of Canada is the same market. CMHC’s outlook focuses heavily on British Columbia, where the labour market is expected to recover in 2026 after limited growth in 2025. Employment conditions will improve, with unemployment trending lower and labour force growth slowing. But slower public sector job growth is likely to limit recovery, keeping unemployment rates historically high. In Vancouver, single-detached homes will remain weak, but demand for denser ground-oriented homes like townhomes is increasing as they offer a more affordable option. In more affordable regions like Victoria and Abbotsford, single-detached homes are still in demand. If you’re buying, the type of home and the specific city matter more than the national headlines.
What the employment data tells you about housing demand
CMHC’s employment data for BC shows a clear shift. Professional, scientific, and technical services employment has grown from an index of 100 in 2014 to 180.2 in 2025 — that’s an 80% increase. Construction employment has grown more modestly, from 100 to 129.5 over the same period. What this means for housing: the people driving demand are increasingly in higher-paying professional and tech jobs, concentrated in major urban centres. If you’re buying in Vancouver or Victoria, you’re competing against that demographic. In regions dependent on forestry or manufacturing, the demand picture looks different.
Timing your purchase around the construction pipeline
Housing starts are expected to slow through 2026, with a more significant decline in 2027–2028. That means fewer new homes will be available in the medium term. If you buy now, you’re buying into a market with relatively high inventory and muted price growth. If you wait until 2027, you may face a market where new supply has dried up and any demand recovery pushes prices higher. The trade-off is between buying when you have negotiating power versus buying when there’s less competition but also less choice.
What the future holds: leasehold reform and policy shifts
While CMHC’s outlook doesn’t directly address leasehold reform, the broader policy environment in Canada is shifting. Government policies around foreign buyer bans, vacancy taxes, and density zoning are all affecting the market. In BC, the technology and professional services sectors have been the fastest growing over the past decade and are expected to play an even larger role, driving housing demand especially in major urban centres. That means the long-term demand picture in cities like Vancouver remains strong, even if the short-term market is soft. If you’re buying for the long haul, the current softness might be an opportunity — but only if your job and finances are stable enough to ride out the uncertainty.
Frequently asked questions about buying in Canada’s current market
Is now a good time to buy a house in Canada? ▾
Will house prices drop in 2026? ▾
Should I wait for mortgage rates to drop further? ▾
Is it better to buy a condo or a house right now? ▾
How does the rental market affect home buying? ▾
What happens to housing starts in 2027? ▾
The real question isn’t timing — it’s whether you can hold on
The CMHC data makes one thing clear: this isn’t a market where you can time a perfect bottom. Resale activity will recover slowly, prices will stay muted, and new construction will slow. The buyers who do well in this environment are the ones who can afford to hold the property for at least five to seven years, regardless of what happens to rates or employment in the next 12 months. If you’re buying with a short-term flip mentality, the data doesn’t support that play. If you’re buying a home to live in for a decade, the current softness gives you room to negotiate that you won’t have when the market eventually tightens again.
Remember: this article is general information only. For advice on your specific situation, speak to a qualified professional.
If this was useful, you might also want to read The Truth About Property Bubbles in Canada and What Investors Need to Know.
Sources and Further Reading
Why Some Canadian Homeowners Are Choosing to Sell and Become Permanent Renters — Explores the rental vs. ownership decision in the current market, which connects directly to the rental affordability trends in this article.
Canada Mortgage and Housing Corporation (2025). Housing Market Outlook – 2026. 🔗
Statistics Canada (2025). Labour Force Survey. 🔗
CBRE (2025). Commercial Real Estate Outlook. 🔗
