The Canadian housing market is entering a period of adjustment, according to a recent forecast from RBC Economics. As a leading real estate brokerage in the Okanagan Valley, Coldwell Banker Horizon Realty keeps a close eye on these trends to help our clients make smart decisions. This report highlights key shifts, including a slowdown in immigration that could turn from a market booster to a drag. We break down the facts below, drawing from RBC's August 2025 update, to show what this means for buyers and sellers in British Columbia and beyond.
Small Gains in 2025, Then a Slight Decline
RBC predicts the price of a typical Canadian home will increase by 0.7% in 2025 before falling 0.7% in 2026. This would bring values to their lowest level since 2023. Home sales are expected to rise 7.9% in 2026, reaching about 504,100 units, but this growth may not push prices higher due to rising inventory and other pressures.
The forecast points to a gradual recovery after a tough start to 2025, influenced by trade issues and economic uncertainty. Nationally, resales are projected to drop 3.5% this year to 467,100 units, with a rebound in 2026. For regions like the Okanagan, where demand has been steady, this could mean more balanced conditions ahead RBC Housing Market Forecast Update.
BC and Ontario Face the Biggest Challenges
The national picture hides stark regional variations. RBC expects most of the price pressure to come from British Columbia and Ontario, where high supply and seller competition will keep values in check.
In British Columbia, home prices are forecast to fall 0.8% in 2025 and 0.1% in 2026. Ontario faces steeper declines: 1.0% in 2025 and 1.4% in 2026. Markets like Vancouver and Toronto are especially at risk, with condo segments showing vulnerability. For example, Toronto's benchmark price was down 5.4% year-over-year in July 2025, per CREA data cited in RBC's analysis Better Dwelling on RBC Forecast.
In contrast, other areas look stronger. The Prairies, Quebec, and Atlantic Canada should see modest price gains in both years, thanks to better supply-demand balance. In the Okanagan Valley, where we operate, local factors like tourism and lifestyle appeal may help offset some provincial pressures, but buyers should watch inventory levels closely.
Immigration's Changing Role: From Boost to Brake
One major driver of this forecast is the shift in immigration. Recent surges in population growth fueled housing demand, pushing prices up in key areas. Now, with federal cuts to immigration targets, this trend is reversing. RBC notes that slower immigration will moderate demand, hitting Southern Ontario and BC's Lower Mainland hardest – regions that saw outsized population gains in recent years.
This change acts as a headwind, reducing household formation and rental demand. Newcomers often rent first, so urban condo markets in Vancouver and Toronto could feel the impact most. RBC's report emphasizes that this slowdown, combined with other factors, will limit price growth RBC Thought Leadership. For BC residents, this might ease competition in some segments, creating opportunities for first-time buyers.
Other Key Factors Limiting Price Growth
Beyond immigration, several issues are keeping a lid on home prices:
- Supply Overhang: Listings are rising faster than sales, especially in urban centers. Inventory in Ontario and BC has reached decade highs, giving buyers more choices and less urgency CP24 on RBC Report.
- Affordability Strains: Owning a home takes a near-record 59.5% of median household income in July 2025, per RBC estimates. Even with Bank of Canada rate cuts since June 2024, high costs in BC and Ontario continue to deter buyers.
- Weak Job Market: Unemployment is expected to peak at 7.1% in late 2025 before easing in 2026. This mixed outlook adds caution, slowing market recovery.
These elements suggest a fragile balance. RBC warns that while a recovery is underway, it will be gradual, with no major price lifts in the near term Real Estate Magazine on RBC.
Stay Informed and Act Wisely
RBC's outlook underscores a market in transition, with immigration slowdowns and supply issues tempering growth. Prices may stabilize or dip slightly, especially in BC, creating potential entry points for prepared buyers. At Coldwell Banker Horizon Realty, we're here to provide tailored advice based on the latest data. Contact us today to discuss how these trends affect your real estate goals in the Okanagan. What's your biggest question about the current market?
The content of this article is for informational purposes only and should not be considered as financial, legal, or professional advice. Coldwell Banker Horizon Realty makes no representations as to the accuracy, completeness, or suitability of the information provided. Readers are encouraged to consult with qualified professionals regarding their specific real estate, financial, and legal circumstances. The views expressed in this article may not necessarily reflect the views of Coldwell Banker Horizon Realty or its agents. Real estate market conditions and government policies may change, and readers should verify the latest updates with appropriate professionals.
