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Canadian Average Home Prices Expected to Dip Further This Year, Says TD Economics

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Canadian average home prices are expected to dip 0.3% in annual average terms this year, TD Economics wrote in a note.

"Our estimate of first half price growth is roughly unchanged from March. Looking ahead, we still see subdued second half gains, consistent with loose supply/demand balances, followed by a modest acceleration in price growth in 2027," said economist Rishi Sondhi.

A weaker-than-expected Q1 had prompted TD to trim its forecasts for 2026 annual average growth slightly. "However, that may have been the low point for housing, as Q2's gain is tracking as we'd previously expected and we've upgraded expectations for the back half of the year," Sondhi added.

TD's upgraded sales growth expectations for B.C. and Ontario for the second half of this year show average prices in B.C. moving sideways and Ontario's falling further over the near term. Prices in both markets are expected to turn positive in 2027. In Quebec, price growth stays firm but continues to decelerate. Alberta prices are cooling, while Saskatchewan's "continues to run hot."

While Sondhi is factoring in pent-up demand and some anticipated downward drift in bond yields in the upgraded forecast, he cautioned that the level of sales is expected to stay low. "In fact, our forecast sees sales taking until 2027H2 to approach their pre-pandemic level, restrained by weak population growth and modest hiring activity over the projection horizon."

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