As of February 2026, three stories were shaping Canadian housing. Ottawa signalled it may change the foreign buyer ban in 2027, RBC reported a seventh straight quarter of improving affordability, and national asking rents fell for a fourteenth consecutive month while a third of renters still pay more than half their income.
I am Moe Asgarian, a real estate broker in Toronto, and these are the three my clients kept asking about. Each one changes something different: the rules, the math, and the rent you pay while you decide.
Ottawa may change the foreign buyer ban in 2027
As of February 2026, the federal government said it wants to revisit the policy that stops foreign buyers from purchasing homes in Canada, and it may change that ban starting in 2027. The ban itself stays in place through the end of 2026. The housing minister, Mr. Robertson, said 2026 would be spent studying how other countries handle this, naming Australia as the main model under review. The stated reason is increasing the supply of affordable housing, with the possibility of opening the door wider to foreign investors again.
The public reaction in early 2026 was mostly negative. In public feedback and commentary, people called the move purely political and said the government is trying to pick up another bloc of voters before the next federal election.
For context, the federal ban on home purchases by foreigners started on January 1, 2023, with the aim of improving people's access to housing and limiting purchases by non-Canadians so that more homes stay available to people living in Canada. It was meant to last two years, was later extended, and as of February 2026 it runs until the end of 2026.
RBC says affordability improved for a seventh straight quarter
RBC's report, released as of February 2026, says housing affordability in Canada and in the GTA has reached its best level, with the bank's affordability index improving for the seventh quarter in a row. The caveat matters as much as the headline. The improvement is slow, and it is close to running out of breath.
In that February 2026 report, a Canadian household on average had to put about 53% of its income toward the costs of owning a home: the mortgage, the taxes, and the costs that come with them. That is lower than the peak of the 2023 crisis, but it is still very high and a long way from anything you would call normal.
Toronto improved the most and still costs the most
RBC says Toronto showed the biggest improvement of any city in the third quarter of 2025, meaning ownership costs there came down further than elsewhere. The reasons are not mysterious. Prices in Toronto fell, listings increased, and sellers became more flexible.
Toronto is still not affordable. In that same February 2026 report, ownership costs there took about 65% of a household's income, and plenty of people cannot get into this market at all. As of February 2026, unemployment was still high, families were still unsure where the Canada and US relationship and the trade war were heading, and the sheer number of homes and condos for sale meant nobody felt rushed. The point RBC makes, and I agree with it, is that the market has come out of its emotional phase and rational choices are possible again. In our own transactions in early 2026 we were seeing deals close with real discounts, and our buyers were taking good value out of this market.
Rents are falling, and a third of renters still pay over half their income
A survey by rentals.ca, reported as of February 2026, found that roughly one third of Canadian renters pay more than half their income in rent. That is happening while rents across the country have fallen for a fourteenth consecutive month as of that same date, which tells you how far the starting point was from reasonable. The old rule that you spend about 30% of your income on rent and live a normal life has stopped meaning much.
Average asking rents in Canada in November 2025 were down 3.1% from a year earlier, averaging 2,074 dollars. That brought rent levels to their lowest since June 2023. Even with that, average rents in November 2025 were still about 3.4% higher than three years before.
What this means for Toronto buyers right now
Put the three together and you get the shape of the market as of February 2026. Policy that may loosen in 2027 but has not yet. Affordability improving slowly from a bad starting point. A rental market that is cooling without becoming cheap. For a buyer in Toronto in February 2026, the practical point is that seller flexibility is real and it will not be permanent. The value is in knowing what a specific property is actually worth and acting while sellers are still negotiating.
If you want to go through any of these in relation to your own plans, fill out the form at the bottom of this page or book a free consultation. Stay well and take care.
Frequently asked questions
Is the foreign buyer ban in Canada ending?
Not yet. As of February 2026 the federal ban on home purchases by non-Canadians, which started on January 1, 2023 and was later extended, remains valid until the end of 2026. The government said it may change the policy starting in 2027 and would spend 2026 reviewing other countries, with Australia named as the main model.
How much of their income do Canadians spend on owning a home?
About 53% on average in RBC's report as of February 2026, counting mortgage, taxes and the related costs. In Toronto the figure was about 65% in that same report. Both are lower than the peak of the 2023 crisis but still far from normal levels, which is why RBC calls the improvement slow.
Are rents going down in Canada?
Yes. As of February 2026, average asking rents had fallen for fourteen consecutive months, and in November 2025 they were 3.1% below a year earlier at an average of 2,074 dollars, the lowest level since June 2023. Even so they remained roughly 3.4% above where they were three years earlier.