Ontario Housing Market Forecast 2026 and 2027

What CREA's October 2026 forecast says about Ontario

The Canadian Real Estate Association revises its resale forecast four times a year, and the October 16, 2026 update was a downgrade for sales almost everywhere. Its reasoning was specific: fixed mortgage rates jumped in the spring, eased over the summer, then climbed again from early September as oil prices rose and the Bank of Canada turned more hawkish. Markets were pricing roughly 100 basis points of rate hikes over the following year when the forecast went out, and the Bank did raise its policy rate to 2.50% on October 28. CREA said September sales had already slipped in response.

For Ontario the forecast reads as another year of falling average prices. The provincial average was $834,550 in 2025, down 4.4% from 2024. CREA now expects $809,334 for 2026, a further 3.0% decline, which makes Ontario the weakest province in the table. British Columbia is the only other province with a forecast decline, and its expected drop is 0.8%. Every other province is forecast to post average price gains between 1.1% and 5.7% this year.

Sales tell a similar story. CREA expects 158,111 Ontario MLS sales in 2026, down 3.0% from 163,057 in 2025, before a 5.3% rebound to 166,438 in 2027. That 2027 rebound is one of the largest provincial sales gains in the forecast, which matters: CREA is effectively saying Ontario buyers have been waiting, and that some of that waiting turns into transactions once borrowers have more certainty about where rates are going. The price forecast for 2027, a gain of only 0.7%, says that extra activity is not expected to push prices up much.

Two cautions apply to every number in that table. First, it is a forecast of the average sale price, which moves with the mix of homes sold as well as with values. If more condos and fewer detached houses trade, the average falls even when no individual home loses value. Second, CREA said the forecast assumes limited Bank of Canada action over the next year, and that the current consensus of interest rate forecasts leans toward fewer hikes than markets were pricing. A faster hiking cycle would make the 2027 numbers look optimistic.

Where Ontario prices actually stand in September 2026

The MLS Home Price Index removes most of the mix problem by pricing a typical home with fixed features. On that measure the Ontario composite benchmark was $736,300 in September 2026, down from $765,900 a year earlier, a decline of 3.9%. The peak was $1,005,100 in March 2022, so the typical Ontario home is now worth 26.7% less than it was at the top of the pandemic market. That is the deepest peak-to-current decline of any province.

The decline is not evenly spread across home types. The single-family benchmark fell 3.8% over the year to $814,900. Townhouses fell 6.0% to $581,400. Apartments fell 6.2% to $484,900, and the apartment benchmark is 27.0% below its own March 2022 peak of $664,200. In other words the condo segment is still leading prices down, which matches what Toronto board data has shown all year and what our Toronto condo market tracker breaks down by segment.

A ten-year view shows how unusual the 2020 to 2022 run was. The Ontario composite was $521,200 in September 2016 and $580,900 in September 2019, then jumped to $830,800 by September 2021 and $1,005,100 by March 2022. Today's $736,300 is still 27% above the September 2019 level. Ontario has given back most of the pandemic surge, but not the gains that came before it.

The regional split inside Ontario

Ontario's provincial numbers are dominated by the Greater Toronto Area, but the regional board data show three distinct groups. The first is the Toronto commuter belt and the southwestern cities, which have fallen furthest from their 2022 peaks. Kitchener-Waterloo's benchmark of $630,200 is 33.2% below its February 2022 peak of $943,300. Hamilton-Burlington, at $718,600, is 30.3% below its peak. London and St. Thomas, at $552,500, is 29.2% below. All three peaked in February 2022, the same month as the Greater Toronto Area.

The second group is the Greater Toronto Area itself. The TRREB-area composite benchmark was $917,600 in September 2026, down 4.6% over the year and 28.3% below its February 2022 peak of $1,279,800. Toronto is not falling faster than its neighbours on this measure; it fell about as far, from a higher level. What makes Toronto different is the size of the condo stock and the number of investor-owned units that do not cover their costs from rent, which is why our Toronto housing market forecast treats condos separately from freehold homes.

The third group is the steadier markets: Ottawa, Kingston and the north. Ottawa's benchmark of $623,500 is down only 0.3% in a year and sits 11.3% below its March 2022 peak, a much shallower correction anchored by public sector employment. Kingston's benchmark was up 0.5% over the year at $542,800. Thunder Bay's October 2026 benchmark of $354,300 was 1.7% higher than a year earlier. Windsor-Essex, at $570,000, is down 2.4% over the year and 19.4% from peak, which puts it between the groups.

Inside the GTA the municipal breakdown from TRREB's October 2026 Market Watch shows how uneven the year has been. The average price in Brampton fell 11.7% to $825,183, Oshawa fell 10.2% to $653,466 and Markham fell 9.2% to $1,117,006. Vaughan was nearly flat at $1,201,704, down 1.0%. Monthly municipal averages are noisy because few homes trade in each, so treat a single month as a signal to watch rather than a trend. Each city has a page with its sources, for example Brampton and Oshawa.

Ontario mortgage arrears have risen almost sixfold

The most important change in Ontario's housing data over the past three years is not a price. It is the arrears rate. The Canadian Bankers Association reports the share of residential mortgages at its member banks that are three or more months behind. In August 2022 Ontario's rate was 0.06%, the lowest of any province, covering 1,263 mortgages. By August 2026 it was 0.35%, covering 7,512 mortgages out of 2,142,755. That is close to six times the 2022 rate and the highest of the August readings for Ontario since at least 2019.

For most of the past decade Ontario had the lowest arrears in the country because rising prices let any borrower in trouble sell at a profit and pay off the bank. That safety valve weakened as prices fell. Ontario now has a higher arrears rate than Alberta (0.28%), British Columbia (0.27%) and Quebec (0.19%), and only Saskatchewan (0.45%) and Manitoba (0.35%) are at or above it. Because Ontario holds 44% of the mortgages in the CBA data, it now accounts for 51% of all mortgages in arrears nationally, 7,512 of 14,624.

A 0.35% arrears rate is still low in absolute terms, about one mortgage in 285. It is not a foreclosure wave. But the direction matters for the forecast because arrears turn into listings. A borrower who falls behind and cannot refinance usually sells, and those sales tend to happen at prices that clear quickly. The mortgage renewal risk by province page compares Ontario's arrears and equity position with every other province.

Renewal math for 2021 and 2022 Ontario buyers

The households most exposed in 2026 and 2027 are those who bought near the 2022 peak and now face renewal. We can estimate their position with public numbers. Take a buyer who paid the Ontario composite benchmark in March 2022, put 10% down and took a five-year fixed mortgage at the 2022 average posted rate of 5.65% over 25 years. After five years of payments about 89% of the original loan would still be owed. Measured against the September 2026 benchmark of $736,300, that borrower's loan would be about 110% of the home's value. With 20% down the figure is about 98%.

For a buyer in September 2021, the picture is better because the purchase price was lower: $830,800 on the composite. With 10% down and the 2021 average posted rate of 4.79%, the loan-to-value at renewal would be about 90%. With 20% down it would be about 80%. Those borrowers are not underwater on the benchmark, but most would not qualify to move their mortgage to a cheaper lender without mortgage insurance or a top-up.

In the hardest-hit regions the numbers are worse. Applying the same March 2022 assumptions to Kitchener-Waterloo gives a renewal loan-to-value of about 120% with 10% down and 107% with 20% down. Hamilton-Burlington gives about 116% and 103%. These are benchmark estimates, not appraisals of any one home, and they assume no extra payments. They show why lenders and regulators focus on Ontario renewals even though the arrears rate is still low.

Payment shock adds to the equity problem. Bank of Canada posted-rate data show the average five-year posted rate was 4.79% in 2021 and 6.10% so far in 2026. On a $500,000 mortgage with a 25-year amortization, that moves the payment from about $2,849 a month at origination to about $3,166 at renewal on the remaining balance, an 11% increase. Most borrowers get discounts from posted rates, so their actual numbers will be lower, but the gap between the two dates is similar. Our mortgage renewal cliff page tracks every cohort since 2000.

Ontario affordability by city

Lower prices have improved affordability, but most Ontario cities are still expensive relative to local incomes. Using benchmark or average prices from the boards and the Statistics Canada 2023 median family income for each census area, the ratio of home price to income is about 8.9 in the Toronto area, 5.8 in Kitchener-Waterloo, 6.2 in Hamilton, 5.5 in London, 6.3 in Windsor and 4.6 in Ottawa. The ratio in Thunder Bay is about 3.2. A ratio near 3 to 4 is what Canadian markets looked like before the 2000s; above 6 is where carrying costs consume a large share of a typical family's income.

Rents matter for the forecast because they set the alternative. CMHC's October 2025 Rental Market Survey put the average two-bedroom purpose-built rent at $2,055 in the City of Toronto, $1,918 in Ottawa, $1,816 in Kitchener, $1,648 in London and $1,364 in Windsor. Vacancy rates ranged from 2.8% in Toronto to 4.2% in Kitchener. Rising vacancy in the commuter belt is one reason investor demand for condos has stayed weak: rents that no longer climb every year cannot cover carrying costs on units bought at 2022 prices.

Price-to-income ratios in this table use each city's figure from our affordability tracker, where the sources table on each page gives the exact measure, area and period. Kitchener-Waterloo's ratio uses the Kitchener-Cambridge-Waterloo family median. See the full list on the Canadian housing affordability tracker.

What the forecast means for Ontario buyers, owners and landlords

A forecast of a 3% price decline means different things depending on where you sit. For a first-time buyer with a stable job, it means the market is not running away. CREA expects the 2027 average price to be only $5,766 higher than the 2026 average. That leaves time to save, compare buildings and neighbourhoods, and insist on conditions such as financing and inspection that sellers refused in 2021. The bigger risk for a buyer now is rate risk rather than price risk: a hike cycle can change what a lender will approve between a pre-approval and a closing date.

For an owner who bought before 2020, the correction has mostly erased paper gains from the pandemic rather than equity they had before. The Ontario benchmark in September 2016 was $521,200. A household that bought then still holds a home worth about 41% more on the benchmark, and has paid down ten years of principal. These owners have the most room to absorb a higher renewal rate, and they are the group most likely to trade up if prices in larger homes keep falling faster than prices in smaller ones.

For owners who bought from mid-2021 to mid-2022, the arithmetic is the opposite. Their homes are worth less than they paid on the benchmark, their renewal rate is likely higher than their original rate, and their lender will see the lower value if they try to switch, refinance or add a home equity line. The practical step is to estimate the home's value today from recent nearby sales and compare it with the outstanding balance at least six months before renewal, which is when most lenders start sending offers.

For small landlords, especially owners of one-bedroom condos bought before completion, the forecast points to a longer squeeze. CREA's numbers imply little price recovery to rescue a negative cash flow, and CMHC vacancy rates of 4% or higher in Kitchener, Oshawa and Barrie in October 2025 suggest rents will not close the gap quickly either. Investors with several units and short renewals are the most likely sellers in 2027, which is part of why condo prices are expected to keep trailing the rest of the market.

Three paths for Ontario prices through 2027

CREA's forecast is a single path. It helps to think about the range around it, using the drivers CREA named: fixed mortgage rates, uncertainty about variable rates, and how much certainty borrowers have about the path of rates.

• Base case, close to CREA. Prices drift lower through the winter, then stabilise in 2027 as sales recover. The average price ends 2027 within a few percent of $815,000. Arrears keep rising slowly but stay below 0.5%. This is the path if the Bank of Canada raises rates once or twice and bond yields settle.
• Softer case. The Bank raises rates by the full 100 basis points markets priced in September. Fixed rates rise further, renewal payments jump again and more stretched owners list. Condo prices in the GTA and the 905 lead a further decline, and the composite benchmark falls toward the low $700,000s. CREA did not publish this scenario; it is our reading of what its stated assumption implies if it fails.
• Firmer case. Inflation cools faster, the Bank pauses after one hike and borrowers gain the rate certainty CREA's 2027 forecast assumes. The 5.3% sales rebound in 2027 arrives early and prices rise slightly faster than 0.7%. Even in this case, Ontario's starting point of high prices relative to income limits how quickly prices can climb.

Whichever path plays out, the gap between Ontario and the rest of Canada is likely to persist. Quebec, Alberta and the Atlantic provinces start from lower price-to-income ratios, which is why CREA expects them to keep rising while Ontario does not. Compare them on the Quebec, Alberta and B.C. forecast pages.

Signals that would change the Ontario outlook

Four data releases will tell you which path Ontario is on before the next CREA forecast in mid-January 2027.

• TRREB's monthly Market Watch. Watch the GTA condo apartment average and the sales-to-new-listings ratio. A ratio that stays below about 40% means buyers have the upper hand and prices tend to fall.
• CBA arrears data. The Ontario rate rose by 0.12 percentage points between August 2025 and August 2026. If the next prints keep that pace, more forced sales are coming.
• Bank of Canada decision on December 9, 2026. A second hike would push variable payments higher immediately and add pressure on renewals in early 2027.
• The MLS HPI composite for Ontario. A month-over-month gain in the benchmark, rather than the average price, would be the first real sign that the correction has ended.

Ontario's housing market is not collapsing, but it is not recovering yet either. Prices are still falling slowly, arrears are rising from a low base and the province's affordability problem has not been solved by a 27% decline. Buyers have time and negotiating room. Owners who bought in 2021 and 2022 should check their equity before their renewal date, not after. For the national picture, see the Canada housing market forecast.