Olga Klimko

CANADA HOUSING MARKET: NATIONAL HOUSING CONDITIONS CONTINUE TO COOL National unit sales significantly fell from December to January. This weakening in sales combined with a sharp rise in new listings contributed to lower the sales-to-new listings ratio to near the lower bound of the estimated range for balanced conditions. However, unusually inclement weather in Ontario centres contributed to amplify the slowdown in national sales in January. National sales (in units) posted a -5.8% (sa) drop from December to January. They weakened in each of the last 3 months, posting a cumulative -10.2% decline (with sa figures) since October 2025. In January, they were 16.2% below their level in November 2024, the period when trade tensions started to emerge as the incoming U.S. administration announced its intention to increase tariffs on imports from key economic partners. Compared to the same month in 2025, national sales were 16.2% (nsa) lower in January. Following 4 months of monthly declines, new listings rose sharply in January (7.3% m/m, sa) but fell 6.2% (nsa) from the same month in 2025. With this significant decline in sales and the sharp rise in new listings from December to January, the sales-to-new listings ratio fell from 51.3% (sa) in December to 45% in January, a 6.3 percentage points (pps) drop. This indicator of housing market conditions now stands very close to our 44.6% estimate for the lower bound of the balanced conditions range. This indicator declined by 4.1 pps (from sa figures) since January of 2025. https://www.scotiabank.com/ca/en/about/economics/economics-publications/post.other-publications.housing.housing-news-flash.february-18--2026.html

Highlights According to the 2022 Canadian Housing Survey, one-third (33.3%) of households reported moving to their current residence within the past five years. Upgrading to a larger or better-quality dwelling was the most common reason reported by households that moved within the past five years, cited by one in four moving households (25.3%). Among households that moved across provinces, employment (42.5%) was the reason cited most often, followed by wanting to be closer to family (27.6%). In contrast, 4.5% of these households reported moving to upgrade to a larger or better-quality dwelling. Movements within the same province but to a different municipality showed patterns that resembled aspects of interprovincial migrations and moves within the same municipality, further supporting the relevance of distance in a households decision to move. Reasons for moving also varied by age of the reference person, and further differences emerged when distinguishing intraprovincial and interprovincial moves. Findings suggest that in addition to the motivation to improve housing conditions and quality of life, various life events and stages of life can influence a households decision to move. https://www150.statcan.gc.ca/n1/pub/91f0015m/91f0015m2026001-eng.htm

Home sales fell 5.8% from December to January, marking the third consecutive monthly decline and the largest drop since February 2025 when U.S. tariffs were announced. New listings jumped 7.3% from December to January, their first increase in five months and the largest monthly increase since January 2025. Active listings increased by only 0.4% during the month due to a higher number of cancelled listings, likely due to the lack of momentum in the market. Market conditions eased during the month but remained balanced at the national level, which largely reflects soft conditions in Ontario and B.C., while markets in all other provinces continue to favour sellers. Housing starts dropped by 42.6K from 280.7K in December to 238.0K in January (seasonally adjusted and annualized), a print well below the consensus calling for 262.5K. Starts decreased in urban areas (-50.2K to 218.2K), while they increased in rural areas (+7.6K to 19.9K). In urban centres, the drop stemmed from the multi-unit segment (-51.9K to 177.0K), while the single-detached segment increased slightly (+1.7K to 41.2K). Decreases in housing starts were seen in Montreal (-11.5K to 17.6K), Toronto (-1.3K to 28.4K), and Vancouver (-0.4K to 33.5K), while Calgary (+10.2K to 25.6K) registered an increase. The TeranetNational Bank Composite National House Price Index declined by 0.4% from December to January after seasonal adjustment. Seven of the eleven CMAs included in the index recorded declines: Ottawa-Gatineau (-2.4%), Winnipeg (-1.0%), Toronto (-0.9%), Edmonton (-0.9%), Vancouver (-0.7%), Hamilton (-0.5%), and Victoria (-0.1%). Conversely, prices rose in Halifax (+2.0%), Quebec City (+1.6%), Montreal (+1.4%) and Calgary (+0.7%). https://www.nbc.ca/content/dam/bnc/taux-analyses/analyse-eco/logement/economic-news-resale-market.pdf

The number of home sales recorded over Canadian MLS Systems fell 5.8% on a month-over-month basis in January 2026. The monthly decline in national home sales was driven primarily by less activity in the Greater Golden Horseshoe and Southwestern Ontario, suggesting that the story was probably more about a historic winter storm than a downshift in demand, said Shaun Cathcart, CREAs Senior Economist. Notwithstanding the chilly start to the year, we continue to expect 2026 will ultimately be defined by pent-up demand from first-time buyers finally seeing a chance to enter the market. January Highlights: National home sales declined 5.8% month-over-month. Actual (not seasonally adjusted) monthly activity came in 16.2% below January 2025. The number of newly listed properties jumped 7.3% on a month-over-month basis. The MLS Home Price Index (HPI) fell 0.9% month-over-month and was down 4.9% on a year-over-year basis. The actual (not seasonally adjusted) national average sale price dipped 2.6% on a year-over-year basis in January 2026. Similar to what happened in January 2025, new supply jumped on a month-over-month basis in January 2026, rising 7.3% as sellers seemed eager to get the year started. The burst of new supply was driven by about two-thirds of local markets, and led by Montreal, Quebec City, Calgary, Greater Vancouver, and Victoria. Meanwhile, Central and Southwestern Ontario were far less prominent and, in many cases, recorded declines. This reinforces the view that winter weather was a primary factor in January in those regions, as it appears to have suppressed both demand and supply. https://www.crea.ca/media-hub/news/home-sales-in-canada-end-2025-quietly-2/

Canadas economy is expected to grow slowly in 2026, as the following factors weigh on demand: geopolitical and trade uncertainty, significantly lower population growth, soft labour markets and modest income growth. Growth is projected to improve slowly in 2027 and 2028. Housing demand is projected to gain momentum while sales stay below historical averages and prices show only modest gains after falling in 2025. New home construction is set to decline through 2028 as developers face high costs, weaker demand and more unsold homes. Condominium starts will be especially weak. Rental projects will continue to drive new supply but will moderate over the forecast period. Rental markets are moving toward balance from an overall national perspective as new supply eases pressure and rent growth slows, giving renters more flexibility before buying a home. Regional housing markets vary significantly. Construction and home sales in Ontario and British Columbia will be weaker than their 10-year averages while, in the Prairies and Quebec, they will remain above their historical averages. Ontario is the only region expected to see price declines in 2026. https://www.cmhc-schl.gc.ca/professionals/housing-markets-data-and-research/market-reports/housing-market/housing-market-outlook

Mortgages remain a hot topic in corporate boardrooms, around policy tables and even during family dinners. Canada is standing right in the middle of the major mortgage renewal waveone that experts have long warned about. In the midst of this mortgage renewal wave, are Canadian homeowners able to keep up with their mortgage payments at higher rates during a time of economic uncertainty and rising unemployment? The national mortgage arrears ratethe share of mortgage consumers who have missed payments for 90 days or morehas been increasing. However, this trend is nuanced, and its interpretation has led to some confusion. The fact is that Canadian homeowners are facing 2 distinct financial realities. On one side, are emerging risks, while on the other, mortgage arrears remain low. On one hand, there are clear signs of household financial strain in regions like Toronto and Vancouver, where arrears are projected to continue increasing steadily. Additionally, certain groups of borrowers across the country are showing greater vulnerability than others. For these groupsespecially the pandemic-era first-time homebuyersthe financial pressure is much more evident. On the other hand, Canadian homeowners have proven to be remarkably resilient given the challenges theyve had to navigate. While the increase in mortgage arrears has been significant (+7 bps between 2023 Q3 and 2025 Q3), arrears remain historically low. https://www.cmhc-schl.gc.ca/observer/2026/mortgage-renewal-wave-strains-some-regions-borrowers

US tariffs and the unpredictability of future trade arrangements are disrupting the Canadian economy. Growth in Canada is expected to remain modest, while inflation stays close to 2%. The Canadian economic outlook is little changed since the October Report. Canada continues to adjust to a new trade landscape. Affected businesses are reconfiguring their trade and seeking new suppliers and markets. As this adjustment proceeds, capital will start being reallocated and some workers will shift into new roles. This adjustment will take time, and growth will be restrained through the transition. Uncertainty remains high. The world is becoming more fragmented, and geopolitical risks are elevated. For Canada, the future of trade in North America is an important uncertainty. https://www.bankofcanada.ca/publications/mpr/mpr-2026-01-28/overview/