Here's what experts predict will happen to Ontario's housing market in 2026

It's been another flop of a year for Canadian real estate, with once-frantic markets like Toronto now slowed nearly to a halt.

The present recession, higher post-COVID interest rates, and more active listings than ever from people desperate to liquidate led to pitiful sales numbers and sinking price points over most of 2024, which worsened drastically in 2025.

But, looking ahead, is there any hope for recovery for developers and homeowners? Or, will things plummet even further, presenting an opportunity for first-time buyers to get into the market for far less than they would have had to pay in years past — even this year?

As we approach December, experts are releasing their predictions for the sector in the coming months, including RE/MAX, which just dropped its 2026 Canadian Housing Market Outlook.

According to the firm, which is, of course, one of the biggest names in the industry, the average Canadian home will indeed deteriorate further in value next year, by about 3.7 per cent. But, the number of home sales is expected to bounce back slightly with about 3.4 per cent more activity than was seen this year.

This will make next year, in RE/MAX executives' opinion, a more balanced market overall after what has been a heyday for buyers, if they are willing to risk the investment.

In hot spots in the GTA and elsewhere in Ontario, though, this small boost in sales will not be enough to offset the glut of available homes and the relatively small number of serious buyers who are willing to actually lock in on a purchase in this economy.

For Toronto specifically, the company predicts another 3.5 per cent dip in the price of the average home in 2026 — to $1,037,354 — which follows a 4.2 per cent drop over the course of this year so far. The RE/MAX team is also calling for a "balanced-to-buyers" market, with a 5 per cent uptick in sales compared to this year (which itself marked a shocking 17.2 per cent decline in sales from 2024).

Only two other Ontario hubs that the brand analyzed are expected to see property prices dwindle further in the next 12 months, including Kitchener-Waterloo (forecasted to decrease by 3 per cent, to $711,101, despite a 4 per cent bump in sales on the way) and Kenora (decreasing by 2.5 per cent to $528,455 in 2026, with a 2.5 per cent increase in sales).

All of the others are anticipated to see home values rise from between 1 per cent (Kawartha Lakes, Sault Ste. Marie) and 5 per cent (Sudbury, Thunder Bay), with two markets remaining flat (London and Grand Bend).

Nineteen of the 20 ON markets included in the forecast (with the exception of Sault Ste. Marie) are set to see more action in the housing market next year than this year — the largest jumps will be in Grand Bend (+12.5 per cent home sales), Barrie (+10 per cent), Caledon (+7 per cent) and Mississauga (+7 per cent).

RE/MAX says across the province, the most affordable homes by dollar amount in 2026 will be found in the notoriously cheap locales of Sault Ste. Marie (average price expected to fall to $356,530), Thunder Bay (~$405,493), Kenora (~$528,455) and Sudbury (~$532,850), while Caledon (~$1,369,630), York Region (~$1,278,387), Toronto (~$1,037,354$) and Mississauga (~$1,033,668).

Along with all of these forward-looking figures, the outlook includes the results of recent Leger surveys that indicate approximately 10 per cent of Canadians are ready to bite the bullet and buy a home in the next year (versus just seven per cent earlier in 2025), though more than 50 per cent believe that the nation's economy will trend even further downward.