After a nearly two per cent drop in 2025, the number of homes sold across the country is expected to jump 5.1 per cent this year, and another 3.5 per cent in 2027, according to new projections from the Canadian Real Estate Association (CREA).
In relative terms, it’s “not a huge increase,” said CREA’s senior economist Shaun Cathcart.
“We’re trying to be conservative here, because affordability is still going to be a constraint. Supply not being around in big numbers in many parts of the country is a constraint.”
CREA predicts 494,512 residential properties will be sold in 2026, and 511,966 in 2027, both years led by Ontario and British Columbia. This follows a -1.9 per cent decline in national home sales in 2025.
The organization cites pent-up demand as a major driver of the growth, particularly among millennial first-time homebuyers who have struggled to break into the market over the past four years.
“That’s one of the biggest problems here,” said Cathcart. “For people in their thirties who are saying, ‘I need something big enough to start a family in,’ it’s just, it doesn’t exist, or it exists in the legacy detached space, which is very expensive.”
Ottawa’s John Gilmer understands that challenge well, having been house hunting for his first purchase for a year now.
“It feels almost like spinning tires,” he tells CTV News about his search.
Gilmer says he and his fiancée have a household income above $200k – some years, it’s closer to $300k – yet still struggle to enter the housing market.
“It’s extremely frustrating,” he says. “It seems that the target keeps getting raised as much, as fast, as our savings go.”
CREA says while affordability challenges are serious, interest rates have now fallen far enough to make home ownership feel possible for many first-time buyers, highlighting a comment from the Bank of Canada governor at the Oct. 29 rate cut as a milestone signal that rates won’t drop further.
“If the economy evolves roughly in line with the outlook in this monetary policy report, Governing Council sees the current policy rate at about the right level to keep inflation close to two per cent while helping the economy adjust through this period of structural change,” said Governor Tiff Macklem at the time.
On Oct. 29 the Bank of Canada cut interest rates from 2.5 per cent to 2.25 per cent. It held that rate at the latest update in December.
The ‘missing middle’
CREA cites the “missing middle” as a huge barrier to home sales.
“We’ve switched over the last 20 years from building low density detached homes, primarily, all the way through to building mostly apartments, without building that missing middle,” said Cathcart.
It’s something realtor Leif Olson sees among his clients.
“People aren’t necessarily interested in like a condominium townhouse or condo itself, and they’re having trouble getting into like a freehold because of where pricing is,” the realtor with Hamre Real Estate Team REMAX BOARDWALK tells CTV News.
Given the market, Olson says anyone interested in home ownership could benefit from starting the research process earlier.
“Have those conversations sooner, even if you’re five years away from maybe being able to do it,” Olson says.
To address the housing crisis, during the federal election campaign now Prime Minister Mark Carney committed to doubling Canada’s rate of residential housing construction to nearly 500,000 homes per year, and creating the new Build Canada Homes (BCH) agency, which launched in September.
CREA’s Cathcart says he has a “sense of optimism” over the medium to longer term about BCH across the next decade.
“Maybe we’ll stop the home ownership rate from falling off a cliff, which it has been doing since 2011.”
Housing prices to rise: CREA
CREA’s projections show house prices are expected to climb this year too. The average home price will jump 2.8 per cent to $698,881. The biggest price jumps will be in Saskatchewan, Quebec and Newfoundland and Labrador, with smaller increases in B.C., Alberta, Ontario and Nova Scotia. This follows a -1.1 per cent price drop nationally in 2025.
In 2027, CREA is predicting average home rates will hit $714,991, or rise by another 2.3 per cent.
The organization notes that would mark seven years in a row of the average home price hovering around the $700,000 mark.
This year, house hunter John Gilmer believes a combination of saving enough money, lower interest rates, and help from his parents will be enough to purchase a home, ideally not more than in the $650k range.
“Most people’s first homes are never their forever home. We have to climb the ladder, but in the same breath, not being in a spot where I’m taking a significant downgrade from the place where I’m renting,” said Gilmer.
