What regional data tells us about Canada’s housing markets going for 2026

Canada is not one market

Canada is contending with higher borrowing costs, slower population growth, and shifting policy. Yet, the impact is far from uniform across the country.

In recent consultations with the Bank of Canada, Altus Group Vice President and Economic Strategist, Peter Norman, shared an analysis on how these forces are playing out in real time across housing and commercial markets. That discussion underscored how regional fundamentals, such as demographics, affordability, product mix, and financing norms, are driving very different adjustment paths.

Understanding these regional differences is more useful than treating Canada’s housing and commercial markets as a single story.

Ontario and B.C. work through a high-rise reset

The sharpest adjustment is underway in Ontario and B.C., particularly in the Greater Toronto Area and Metro Vancouver.

In Toronto, commercial real estate activity continues to trend lower. Land transactions have fallen sharply, contributing to an estimated 15% decline year-to-date in overall commercial transaction volume, compared to the same period last year. Outside a few resilient segments such as high-end hotels, the development pipeline is subdued.

Metro Vancouver offers a more pronounced example, as the pre-sale condo market has largely seized up. According to transaction data from Altus Data Studio, year-to-date sales are down roughly 60% from an already weak 2024, and even top selling projects are only achieving a small number of sales each month. Projects launched or advanced over the past two years have been paused, redesigned, sold privately at discounted pricing, or left dormant.

Despite different planning histories, Toronto and Vancouver now share a similar bind:

• New high-rise supply is difficult to bring forward at those prices because large projects still depend on significant pre-sales, and pre-sales have dropped off significantly

• Developers have already committed substantial resources to approvals, design, and servicing, making it difficult to rethink the scale and layout of a project partway through

The widely referenced “70% pre-sale rule” is not a regulation, but it is a lending convention that has functioned as a hard constraint in these markets. In today’s conditions, that convention can prevent otherwise sound projects from moving ahead.

Cost signals add another layer. Official construction cost indices still show annual inflation of 4-6% in cities such as Toronto. Altus Group’s Quantity Surveyors, using current tender results, see overall costs for high-rise projects that are 15-20% lower than at the peak two years ago. If lenders, policymakers, and developers rely only on lagging indices, they may misjudge feasibility in markets that are already seeing some relief in actual build costs.

Taken together, these factors mean Ontario and B.C. are not simply “slower”. They are actively rethinking how and what they can deliver under a high-rise model that no longer fits current demand and financing conditions.

Quebec finds a balance between ownership and rental

Quebec is following a different path. Housing starts have held up so far, but underlying risks are building as population growth is expected to slow sharply over the next few years. In Montreal, new home sales are already weakening: sales in the first half of this year are down about 30% from last year and are running roughly 80% below pre-pandemic norms.

At the same time, the Montreal market has shifted more than any other major centre toward purpose-built rental, with close to 10,000 new units expected to start this year. That pivot helps mitigate some of the downside risks for the construction sector even as ownership-oriented projects slow, and it reflects a structural adjustment in how new housing is being delivered.

For lenders, developers, and policymakers, Quebec’s experience underscores that weaker new home sales do not necessarily translate into a broad construction downturn if the mix of product can shift toward segments where demand remains deeper and more stable and capital remains available.

Alberta and Atlantic Canada follow different adjustment paths

Alberta is also adjusting, but from a different starting point.

Calgary and Edmonton are now showing early signs of softer resale demand, weaker new home sales, and moderating commercial transaction activity. Altus Data Studio points to a cooling compared with recent peaks. Even so, Alberta’s recent population growth has been more stable and less sensitive to rapid policy shifts than in Ontario, Quebec, and B.C., and housing remains relatively more affordable.

High-rise, pre-sale driven product is a smaller share of overall activity. That does not insulate Alberta from higher rates or weaker sentiment, but it does mean the province is less exposed to the most constrained part of the development model.

Atlantic Canada offers another useful contrast. In several markets, smaller mid-rise buildings and selective, speculative construction are already common. Developers and lenders in the region have long worked with different risk structures, including projects that move forward with lower or no pre-sale thresholds when market depth supports it.

These differences matter because they show that some of the adjustments that feel disruptive in Ontario and B.C., such as greater reliance on mid-rise, revised pre-sale expectations, more varied project scales, are already standard practice elsewhere in the country.

Why regional differences matter for 2026 decisions

Heading into 2026, the key question is not whether Canada’s market is stronger or weaker, but where exposure lies. Ontario and B.C. carry more risk in large, pre-sale dependent high-rise projects, while Quebec’s softer population outlook and weaker new home sales are partly offset by a strong purpose-built rental pipeline. Alberta’s stronger affordability and more durable recent population growth provide more cushion, and Atlantic markets rely more on smaller, mid-rise formats and different risk structures. 

• For lenders and equity investors, that means advance rates, pre-sale expectations, and required returns should be calibrated to local evidence, not a national rule of thumb

• For developers, 2026 pipeline and product mix decisions hinge on understanding where the high-rise model is most constrained and where mid-rise, infill, or alternative formats are better aligned with local incomes, demand, and financing appetite

• For policymakers and planners, it suggests that growth and infrastructure plans built around a continuous wave of towers in some markets may need to shift toward a more flexible mix of forms and timelines

The adjustment underway is less about a single Canadian housing story and more about how different regions are re-pricing risk and reshaping their development models. Tools such as Altus Data Studio, which bring together regional apartment transactions, residential land transactions, and new home sales in one place, can help market participants see those differences clearly and test decisions against current conditions rather than national averages or past cycles. Those who ground their 2026 strategies in that kind of up-to-date, region-specific insight will be better positioned as this shift unfolds over the next 12 to 24 months.

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