BMO Capital Markets Senior Economist Robert Kavcic has been one of the more consistent voices in Canadian real estate analysis over the past several years, and not in the way the industry usually likes. He called the market cresting in 2021. He said the correction would take years to unwind, not quarters. And now, with February 2026 data in hand, his read on where things stand is not particularly encouraging.

His most recent note describes the national market as continuing its "long and slow downturn," with conditions still varying by region. The February sales-to-new-listings ratio hit its lowest point for that month in at least a decade, a signal of weak demand relative to supply. Kavcic acknowledges that spring can shift the picture, but he isn't counting on it. His exact words: "We await the spring market for a better indication of whether conditions will tighten up in 2026."

It's worth unpacking what the national data actually shows, and then asking the more relevant question: how much of it maps to your local market?

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The National Numbers Are Sobering

The price trajectory Kavcic is describing is stark. According to CREA data, the seasonally adjusted benchmark price for a typical Canadian home peaked at $827,600 in February 2022, after surging 56.7% from the start of the pandemic low-rate period in April 2020. Since then, prices have fallen about 20% to $661,100 as of February 2026, wiping out gains going back to early 2021.

That's the nominal figure. Adjusted for inflation, the picture is worse. BMO's analysis suggests the real decline is materially larger than 20%, and Kavcic has argued that Canadian homeowners have effectively seen close to a decade of no real price appreciation once inflation is stripped out. To put that in context, he points to the 1990s cycle as the last comparable episode, after which it took on the order of two decades for Greater Toronto prices to recover their inflation-adjusted value. Canada hasn't seen a correction of comparable magnitude since then, and Kavcic doesn't mince words: "You have to go back to the bad 1990s cycle to find something similar."

He adds one more note that makes a quick turnaround unlikely. With inflation expected to pick up in the months ahead, driven partly by expected tariff-driven cost pressures, real home prices could face additional erosion even if nominal prices hold steady or tick slightly upward.

There is a counterpoint worth hearing. CREA's own senior economist, Shaun Cathcart, is more optimistic, expecting national sales to grow 5.1% in 2026 and projecting a modest 2.8% bump in the national average price to $698,881. He points to pent-up demand from first-time buyers who have been waiting for rates and prices to find a bottom. The two views aren't necessarily incompatible: a modest sales recovery is possible alongside continued real price stagnation.

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How This Maps to the Okanagan

The Okanagan is not Toronto or Vancouver, and that distinction matters here. It doesn't insulate the region from national trends entirely, but it does shape how those trends arrive and how long they take to work through the system.

CBHR's own February 2026 Okanagan market overview captures where things actually stand locally. The Central Okanagan largely held steady in February, with 296 residential units sold and a 3.3% decline in unit sales year-over-year, a significant improvement over January's steeper drop, suggesting the market found some footing heading toward spring. Single-family homes averaged $1,025,816, down 10.4% year-over-year, though the median decline was larger, reflecting fewer high-end transactions rather than a broad price collapse. Townhouses and condos have faced more pressure, with condo benchmarks down in the high single digits year-over-year as of early 2026.

BC Assessment's January 2026 data tells a similar story. The typical assessed value of a median single-family home in Kelowna as of July 2025 was $918,000, a 2% decline from the prior year, and the third consecutive year of assessed value loss after the pandemic surge. The deputy assessor flagged most Thompson-Okanagan communities as likely to see changes in the negative 5% to positive 5% range going forward.

That's not the same as a collapse. It's a correction in markets that ran very hard very fast, and it's arriving more gradually here than in the condo-heavy markets of Toronto and Vancouver that are absorbing the sharpest drops.

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What the Demographic Shift Means

One of Kavcic's structural arguments deserves particular attention. He has pointed out that millennials, the generational cohort that powered much of Canada's housing demand surge, have now reached their demographic peak for homebuying. Going forward, that fuel diminishes. This is a national pattern, not a local one, but it reinforces why waiting for a demand-driven price recovery may be a long game.

The population picture has also shifted sharply. Through mid- to late 2025, Statistics Canada's quarterly estimates showed population declines on the order of 70,000 to 100,000, driven almost entirely by a sharp drop in non-permanent residents as Ottawa tightens immigration targets. Kavcic has described the country as now in an era of normalization on population growth, with near-zero growth expected for the next couple of years. Less population growth means less housing demand pressure nationally, a meaningful shift from the immigration-driven surge of 2022 to 2024.

The Okanagan is less exposed to this shift than Vancouver or Toronto, which saw the most dramatic swings in population-driven rental and purchase demand. But it isn't immune either, particularly at the investor and short-term rental end of the market where speculative demand has already pulled back substantially.

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What This Means Depending on Your Situation

For buyers, Kavcic's read actually contains something useful. He has said consistently that the spread between what sellers are asking and what buyers will pay is wide, and that over time, it is more likely the ask comes down than the bid goes up. That dynamic is visible in the Okanagan right now, where inventory remains elevated and days on market have lengthened. Buyers who move with clarity on value and financing are in a better negotiating position than they've been in years.

For sellers, the honest message from the data is that pricing to 2022 expectations is a losing strategy. Well-priced properties are still selling. The February local data confirms that. But the buyers in this market are financially capable and not in a hurry, and they're paying close attention to actual transaction prices rather than asking prices. Sellers who lead with accurate pricing tend to sell faster and with fewer concessions than those who test the ceiling and retreat.

For long-term investors, the BMO analysis doesn't change the fundamental case for well-located Canadian markets. CBHR has previously written about BMO's own projection that Canadian real estate prices are expected to recover to peak levels by 2029, a timeline that implies patience is required but not forever.

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The national correction Kavcic is describing is real. So is the relative resilience of markets like the Okanagan within it. Both things can be true at once, and understanding which dynamic applies to your specific situation, your property type, your price point, and your timeline, is where the analysis has to get local. The team at Coldwell Banker Horizon Realty works in this market every day and can give you a grounded read on what the numbers mean for your next move.