Canadian Cities With Declining Home Prices in 2026

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Canada’s housing market has shifted gears heading into 2026. After years of rapid price growth followed by a sharp affordability squeeze, conditions are starting to normalize, but not evenly. While national supply constraints continue to support prices in many markets, several regions have already gone through meaningful price corrections. 

While home prices remain elevated nationally, several regions have experienced a more significant reset over the past year. For buyers, these corrections matter because they represent where affordability has improved and where value is quietly emerging for borrowers.

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Key Takeaways

• Home price corrections are region-specific, with Ontario accounting for most of the steepest declines.
• Affordability has improved in select markets, even as national prices remain elevated by supply constraints.
• With interest rates relatively stable, income requirements are becoming the main factor impacting affordability.

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Canadian Cities With Declining Home Prices in 2026

Across Canada, home prices have declined in some regions while climbing significantly higher in others. Price movements are rarely uniform, as regional housing markets are driven by local employment trends, population growth, housing supply, and investor activity. This dynamic results in home prices stabilizing in some cities, still adjusting in others, and rising in others. 

With mortgage rates set to remain stable, buyer confidence is expected to gradually return in 2026. The cities below stand out for recording the largest home price declines over the past year. Ontario dominates this list, accounting for 4 of the 5 markets with the steepest corrections.

1. Powell River, BC

Powell River has seen a 17.5% year-over-year decline in home prices. Prices have fallen from $640,492 in December 2024 to $528,258 in December 2025. To afford the average-priced home, you will need a gross income of approximately $99,000, down from approximately $120,000 a year earlier.

2. Chatham-Kent, ON

This municipality, located in southwestern Ontario, comprises many small towns and villages. The area has seen a 13.2% decline in home prices since December 2024. The average home price in Chatham-Kent was $383,206, down from $441,428. To qualify for the average-priced home in the area, you need a gross annual income of approximately $73,000. 

3. Oakville-Milton, ON 

Home prices in Oakville-Milton have declined 10.1% year-over-year, dropping from $1,170,800 to $1,052,600. As one of the most expensive regions for real estate on this list, you’ll need to make approximately $217,000 annually to qualify for the average home. 

4. Huron Perth, ON

Homes in these counties fell 9.5% on average, from $587,100 in December 2024 to $531,400 in December 2025. To qualify, you need to make approximately $100,000 a year to afford an average-priced home in the area.

5. Durham Region, ON

Home prices in the Durham region fell 8.8% to $840,959 from $921,682. However, you’ll need to make the second-highest income out of the other 4 cities mentioned, approximately $156K a year, to qualify for the average-priced home in the area.

Honourable Mentions

There were quite a few cities with year-over-year declines in home prices. However, Ontario stood out as the province with the most regions experiencing the steepest overall price declines. Here’s a list of 10 more cities with declining home prices that didn’t make the cut for our top 5:

• Kitchener-Waterloo, ON -8.7%
• London and St. Thomas, ON -8.3%
• Kawartha Lakes, ON -8.1%
• Guelph, ON -7.6%
• Woodstock-Ignersoll-Tillsonburg, ON -7.6%
• Hamilton-Burlington, ON -7.4%
• Niagara Region, ON -7.4%
• Peterborough and the Kawarthas, ON -7%
• Barrie and District, ON -6.5%
• Northumberland Hills, ON -6.4%

Reports Vary: What Banks & Analysts are Predicting for 2026

Some early predictions are out on what we can expect for the housing market in 2026. Many of the Big 6 Banks are predicting that interest rates will stagnate over the year, with only a few diverging, predicting that we could see rates increase by up to 50 basis points at the end of the year.

CREA Forecasts an Increase of 2.8% in Average Home Prices in 2026

CREA’s updated forecast expects that sales activity will pick up in 2026. Home prices are expected to rise 2.8% to $698,881 nationally, with Quebec, Saskatchewan, and Newfoundland and Labrador expected to see the most significant increases.

Canadian Regional Housing Forecasts

Overall, reports suggest that the housing market in Canada will see an increase in sales, driven by pent-up demand from buyers who were waiting on the sidelines and priced out of the market. But what does this mean for individual regions? Will it be a seller’s market across the board? 

Regional variations exist in these forecasts and are expected to diverge widely across Canada. For example, while some provinces and cities may experience a decline in home prices, others could see an increase or remain relatively stable. It is also important to remember that any changes in mortgage rates or other economic factors could affect these predictions.

To get the most region-specific insights, consult our various real estate market outlooks below:

• Canada Housing Outlook
• Québec Housing Outlook
• Ontario Housing Outlook
• Montreal Housing Outlook 
• Toronto Housing Outlook
• Vancouver Housing Outlook
• Ottawa Housing Outlook
• Hamilton Housing Outlook
• London Housing Outlook
• Edmonton Housing Outlook
• Calgary Housing Outlook
• Winnipeg Housing Outlook

Final Thoughts

The data suggests that home prices and sales may look very different across regions in 2026 and during the spring lending season. There are pockets of opportunity where home prices are falling and correcting, while other areas are seeing home prices increase at a much faster pace than in previous years. If you plan to buy in 2026, it’s essential to stay up to date on the state of your local housing market and any changes in global economic factors that could influence interest rates. 

To build a mortgage plan that fits your goals and the realities of today’s market, connect with a nesto mortgage expert for personalized guidance.

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