TORONTO — A new report says Ontario’s housing market is expected to improve “modestly” next year as favourable economic conditions help push buyers off the sidelines, though higher borrowing costs could dull the extent of the rebound.
Desjardins senior economist Kari Norman calls the province’s housing sector “weak” despite improved affordability, greater buyer choice and easing rental conditions.
Her report predicts existing home sales would rise nearly five per cent in 2027 compared with this year, remaining well below long‑term norms, while balanced market conditions should lead to average price growth of 2.4 per cent next year.
The analysis also says the interest rate backdrop will “likely remaining challenging,” with two rate hikes by the Bank of Canada expected in 2027 that would limit affordability gains from recent home price declines and rising disposable incomes.
That would also raise construction financing costs, as the report projects housing starts to rise around six per cent to nearly 65,000 units in 2027 — still more than 30 per cent below levels seen in 2021 and 2022.
The report says rental conditions should remain relatively balanced, as new condominium and purpose‑built rental completions add supply at a time when population growth is likely to be weak.
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Sammy Hudes, The Canadian Press
This report by The Canadian Press was first published Oct. 21, 2026.
