Six Conditions for Canada's Housing Market to Grow Again

As of June 2026, Canada's housing market needs six conditions before prices grow again: active listings under three months of inventory, stable interest rates, a rental market that pays investors, underwater pre-construction owners cleared out, government policy that helps, and consumer confidence. No single one is enough.

I am Moe Asgarian, a real estate broker in Toronto with RE/MAX, ranked #47 in the company worldwide, and clients ask me the same thing every week: when do prices go up again? The honest answer, as of June 2026, is that a recovery is not around the corner. Canadian housing has been through one of the strangest stretches in its history, a violent run up followed by one of the largest declines on record, with prices in some cities, as of June 2026, more than 30% below their peak. The question that matters now is not when we return to the old records. It is what has to change for the slide to stop and growth to start.

Condition One: Inventory Has to Fall Below Three Months

In June 2026 the Toronto market overall sat in a relatively balanced place, but in many segments there were still more listings for sale than there was demand to absorb them. For the market as a whole, active listings have to come down to under three months of inventory. Touching that level once is not enough either. It has to hold for a while. Until supply and demand shift in favour of sellers, broad price growth is hard to produce.

Condition Two: Rate Stability Matters More Than Low Rates

A lot of people assume falling interest rates are what lift house prices. That is not really how it works. Stability matters more than the number itself. The market does not need very low rates. As of June 2026, even rates between 3.5% and 4% can be acceptable, on one condition: that they stay put.

The real problem is that buyers and sellers still do not have enough certainty. The Bank of Canada changed its policy rate many times over the years leading up to 2026, and that alone pushed a lot of people to postpone a purchase or a sale. Once people are convinced rates will sit in one range for a long stretch, the decision gets much easier to make.

Condition Three: The Rental Market Has to Pay Investors Again

For years a big share of demand came from investors, the companies and individuals who bought in the hope that prices would rise. By June 2026 that had changed. Going through the monthly numbers, price growth was not guaranteed the way it once was, so you cannot build a plan on income from a condo or a house getting more expensive.

So investors now look much harder at rental income. As of June 2026 a large number of new rental projects were under construction in Ontario and British Columbia. Those projects add supply to the rental market and may even push rents down further. Good news for tenants, less so for investors. Until rents grow and returns on investment improve, an important part of the investor pool does not come back.

Condition Four: Underwater Pre-Construction Owners Have to Clear

The fourth condition is investor balance sheets turning positive. As of June 2026, many pre-construction buyers owned units worth less than the price they originally agreed to pay. Some had rented those units out and were still paying out of pocket every month. A lot of them had not decided whether to accept the loss and sell or wait for the market to come back. On top of that, builders were sitting on a large number of unsold units.

If prices are going to rise one day, that inventory has to be absorbed. At the same time, new construction had dropped sharply by June 2026. Put those two together and the next few years could create the conditions for a gradual improvement, because the pipeline of new supply thins out while the existing overhang slowly clears.

Condition Five: Government Policy and the Foreign Buyer Ban

Some of the policies in place as of June 2026 have been a positive signal. Removing HST on certain projects helps builders sell units that have been stuck on their hands. The bigger item is the end of the ban on home purchases by foreign buyers, which expires at the beginning of 2027. If it is not extended, part of that demand can come back into the market. The foreign buyer tax, in force as of June 2026, stays in place, but reopening the path for foreign investment can still have a positive effect.

Condition Six: Consumer Confidence, and When This Could Happen

The sixth one may matter most of all. In the end people have to feel confident about the future of the economy. They need less worry about their own job security and more certainty that they can carry mortgage payments in the years ahead. That is exactly why I spend so much time on economic news and the job market. Confidence runs through a chain of markets, and it starts with people having work and feeling secure in it. The old assumption that any property will be worth more in a few years and hand you a good return is gone, which is one reason the decision to buy had become harder for many families by June 2026.

No single factor rescues Canadian housing. It takes the whole set: lower inventory, rate stability, a stronger rental market, loss making investors clearing out, government policy that works, and the return of consumer confidence. My view, as of June 2026, is that if three or four of these arrive over the next few years, the decline can stop and the market can start recovering gradually. If all six happen at once, then you can expect a serious growth period. When? If anyone tells you it happens this year, I would not give that much weight. A few years out is the reasonable way to think about it. If you want to work out what this means for your own timing, fill out the form at the bottom of this page or book a free consultation. Stay well and take care.