Canada Housing Market Weekly – April 2026: TD’s Sharp Downgrade, Toronto -6.7%, and Growing Regional Divergence

In late March, TD Economics released a report that caught the market's attention. The bank revised its 2026 national home price forecast from an increase to a decline of 0.3%, and its sales forecast from growth to a drop of 1.8%. Ontario and B.C. were flagged as "hot spots" for declines, with projected drops of 4% and 3% respectively.

But the real significance of the report lies not in the numbers themselves, but in what they admit: previous optimistic expectations were wrong. TD had assumed that a soft economic landing and lower interest rates would support housing. Instead, the job market is cooling, population growth is slowing, and condominium supply is hitting the market at a record pace. This isn't "bearishness" — it's an acknowledgment of being offside. For a deeper look at employment and housing, see unemployment at 6.7% – in-depth analysis.

More importantly, TD's forecast is still a "national average." Ontario's 4% drop and Quebec's possible small gain are averaged into a 0.3% national decline. That number itself is a reminder: in Canada's 2026 housing market, national indicators are increasingly meaningless. As we've detailed in our Canadian housing reality series, the "record" $18.6 trillion in household net worth is largely driven by equities — housing assets are actually shrinking.

Toronto: a buyer's market has arrived, but buyers are hesitating. March sales rose 1.4% month-over-month — the first increase in five months. But prices are still falling, with average selling prices down 6.7% year-over-year. The more telling signal: new listings are down 16.7% year-over-year. Sellers are holding back — those who bought at the peak in 2020-2022 are unwilling to take a loss. This standoff of "sellers not selling, buyers not buying" is a classic bottoming pattern. For a full Toronto market analysis, see Toronto GTA Market Weekly.

Montreal: the detached home seller's market continues. Median detached prices rose 7% year-over-year, with average days on market dropping from 42 to 33. But condos are a completely different story — inventory surged 21%, with prices barely moving. Two fates, same city. Quebec's low 5.4% unemployment is a key support for detached homes, while the condo supply glut is a national issue. For a full Montreal analysis, see Montreal Market Weekly.

Vancouver: detached homes are "awakening." March detached sales rose 8.3% year-over-year, with prices up 1.0% month-over-month — the only positive detached price growth among Canada's four largest cities. Andrew Lis, chief economist at the Greater Vancouver Real Estate Board, used a telling phrase: a "new phase." The market is moving from "indiscriminate declines" to "structural divergence." For a full Vancouver analysis, see Vancouver Market Weekly.

Calgary: the most extreme structural split. Detached inventory sits at just 2.1 months — a seller's market returning. Condos, meanwhile, are nearing inventory levels seen during the 2008 financial crisis — a deepening buyer's market. Two completely different realities in the same city. For a full Calgary analysis, see Calgary Market Weekly.

National average prices, national average sales, national average inventory — these metrics have lost almost all meaning in Canada's 2026 housing market. The reason is simple: Toronto and Vancouver are so large that their movements "drown out" what's happening elsewhere.

In March, Toronto and Vancouver saw year-over-year price declines of 6.7% and 6.8%, respectively. But Montreal detached homes rose 7%. The national average gets pulled to "slightly down," but that number has no real value for anyone making decisions in any one city.

That's why we insist on city-level analysis. In Toronto, you're in a buyer's market; in Montreal, a seller's market; in Calgary, you're a detached home seller but a condo buyer. Same country, different rulebooks. For tailored home-buying strategies across cities, see 2026 Canada home buying – tiered strategies.

A recent TD Bank survey revealed a risk many are overlooking: 56% of homeowners expecting higher payments plan to cut spending, and 67% feel anxious about upcoming mortgage renewals. Those who secured 2.36% rates during the pandemic may now face renewal rates around 3.95% — a 20-30% jump in monthly payments. For a detailed breakdown of the mortgage stress test, see 2026 Canada mortgage stress test explained.

2026 is a peak year for mortgage renewals. This isn't a question of "if" — it's a question of "who will be affected." Highly leveraged homeowners with low savings are the most vulnerable. And that will feed back into the housing market: if many are forced to sell, supply will increase further. For a detailed analysis of HELOC debt risks, see HELOC debt at six-year high.

But there's another side to the coin: about 30% of respondents said they are more likely to buy a home before year-end, citing lower prices and stabilizing interest rates. Pent-up demand is looking for an exit.

In 2025, approximately 120,000 people left Canada — the fourth consecutive annual increase. Those leaving are not low-skilled workers, but highly skilled professionals: doctors, engineers, IT workers, and researchers. Many of them would have been potential homebuyers. Their departure reduces demand. For a full analysis of brain drain, see Canada's brain drain special report.

On one side, a surge in condo supply; on the other, a loss of potential buyers. The result is sustained downward pressure on prices. This is the deeper reason why the housing crisis can seem "hopeless" while still experiencing a bear market correction. For the risks of the condo supply wave, see GTA pre-construction default warning.

In Canada's high-priced regions (e.g., Vancouver), the price-to-income ratio is now about 12x. That means a household would need 12 years of zero spending to afford a home. The historical norm (post-war 80-year average) is roughly 4.23x. There are three ways to deflate a bubble: ① a crash in prices; ② a surge in incomes; ③ prices flatten or drift lower while incomes slowly rise. Paths ① and ② are unlikely. The most probable is path ③: prices flat or down 10-15% over 5-8 years, with incomes growing slowly, bringing the ratio down from 12x to the 8-9x range.

A bear market bottom isn't a price point — it's a long stretch of time. 2026 is a "price-for-volume" bottoming year, with a real recovery delayed until 2027 or even 2028. For more on price trends, see Canadian housing reality series.

On April 16, the Canadian Real Estate Association (CREA) will release March national data and its quarterly forecast update. The market is focused on three questions: Have national sales bottomed? What is the inventory trend? Will the 2026 full-year forecast be revised further downward?

Regardless of the data, one trend is clear: 2026 is a "price-for-volume" bottoming year. A genuine recovery may not come until 2027 or later. This isn't about timing a "bottom" — it's about enduring a long stretch. For the impact of interest rate changes, see BoC holds at 2.25% – deep dive and 2026 interest rate scenarios.