While the rest of the country seems to be finding its footing, Ontario is moving in a different direction. If you have been watching the news lately, you might have noticed a strange trend where cities like Mississauga and Toronto are seeing prices soften while other provinces stay resilient. This latest housing market forecast from CMHC confirms what many on the ground have felt: Ontario is currently the only province in Canada where home prices are expected to keep falling through 2026.
This does not mean the sky is falling, but it does mean the rules of the game have changed for anyone looking to buy or refinance in the GTA. At Canadian Mortgage Services, we have been helping families since 1988, and we’ve seen these cycles before. The current situation is a unique mix of high inventory, muted sales in expensive urban centers, and a condo market that is hitting some serious speed bumps. Understanding these shifts is the only way to make a smart move in today’s market.
Table of Contents
- The 2026 CMHC Outlook: Why Ontario is Different
- GTA Price Trends: A Reality Check
- How New Mortgage Rules Impact Your Buying Power
- Mortgage Strategies for a Cooling Market
- Frequently Asked Questions
Key Takeaways
- Ontario Price Decline: CMHC identifies Ontario as the sole province where prices will likely continue to drop through 2026.
- GTA Market Shift: Average sold prices in the GTA fell to $1,051,969 in April 2026, a 5.01% drop year-over-year.
- $1.5M Insured Cap: Buyers can now purchase homes up to $1.5 million with less than 20% down, a major shift from the old $1 million limit.
- 30-Year Amortization: First-time buyers and those purchasing new builds can now access 30-year insured mortgages to lower monthly payments.
- Condo Slump: Housing starts in Ontario are hitting two-decade lows because condo pre-construction sales have stalled.
The 2026 Housing Market Forecast: Why Ontario is Different
According to the latest data from CMHC, Ontario is standing alone this year. While provinces like Alberta and Quebec are seeing price growth, our local market is struggling with a surplus of inventory that buyers aren’t quite ready to swallow. High interest rates have done their job, perhaps a little too well in expensive pockets like Richmond Hill and Oakville. Buyers are being more cautious, and sellers are finally starting to realize that the peak of 2022 isn’t coming back anytime soon.
High inventory is particularly noticeable in the condo sector. For years, investors drove the market in places like Vaughan and Markham, but with carrying costs exceeding rental income, many are looking for the exit. This has created a backlog of listings that is keeping a lid on prices. If you’re looking for Home Loans, Refinancing & HELOC options, this environment actually creates some interesting opportunities that didn’t exist two years ago.
But it’s not just about existing homes. CMHC projects that housing starts in Ontario will fall to near two-decade lows in 2026. This is mostly because developers can’t get enough pre-construction sales to break ground on new towers. When new supply dries up, it usually leads to a price spike later on, but for the next 18 months, the forecast suggests a continued cooling period.
GTA Price Trends: A Reality Check
The numbers don’t lie. The average sold price in the GTA for April 2026 sat at $1,051,969. That is a 5.01% decrease compared to the same time last year. While a 5% drop might not sound like a lot on a $500,000 home, it represents over $50,000 in equity lost on an average GTA property. For homeowners in Ajax or Oshawa, this means your strategy for a renewal or a move needs to be much more precise.
Tomorrow, May 19, 2026, StatCan will release the April CPI data. This is a big deal because it will dictate what the Bank of Canada does on June 10. If inflation continues to cool, we might see some relief on the rate front, but for now, the market is pricing in a “higher for longer” reality that is keeping buyers on the sidelines. We’ve seen this play out in Hamilton and Burlington as well, where balanced market conditions have replaced the bidding wars of the past.
| Purchase Price | Min Down Payment (New Rules) | Max Amortization (Insured) |
|---|---|---|
| $1,000,000 | $75,000 | 25 or 30 Years* |
| $1,400,000 | $115,000 | 25 or 30 Years* |
| $1,500,000+ | 20% ($300,000+) | 30 Years (Uninsured) |
*30-year insured amortization is available to all first-time buyers and all buyers of new-build homes as of December 15, 2024.
How This Housing Market Forecast Intersects with New Rules
The federal government introduced some massive changes that took effect in late 2024 and early 2025. These were designed to help people get into the market, even as prices in the GTA remain high. The most significant change is the insured mortgage cap. Previously, if you wanted to buy a home for more than $1 million, you had to put 20% down. Now, that cap is $1.5 million. This is a massive shift for families in Whitby or Milton who were stuck between a small condo and a detached home they couldn’t afford the down payment for.
And then there is the 30-year amortization. If you are a first-time buyer, or if you are buying a brand-new home, you can now stretch your payments over 30 years even with a high-ratio insured mortgage. This helps lower the monthly cost, making that housing market forecast of falling prices even more attractive for those entering the market. You should check out our First Time Home Buyer Mortgage guide to see how these rules apply to your specific situation.
The Politics and Mortgages surrounding these changes are complex, but the goal was clearly to stimulate demand in a cooling Ontario market. We also have the new GST/HST rebate for first-time buyers. As of March 12, 2026, you can get a full rebate on the federal portion of the tax for new builds up to $1 million, with partial rebates up to $1.5 million. This is a huge win if you are looking at new developments in places like Brampton or Toronto.
Mortgage Strategies for a Cooling Market
When prices are falling, your mortgage strategy shouldn’t be the same as when they are rising. If you are renewing soon, you might be worried about the stress test. Here is some good news: as of November 21, 2024, the stress test is no longer required for straight, stand-alone uninsured renewal switches between federally regulated lenders. This means you have more freedom to shop around for a better rate without being penalized by the MQR rules.
Another option to consider is the insured refinancing for secondary suites. Effective January 15, 2025, you can refinance your home to build a legal suite even if your home is worth up to $2 million. This is a great way to add a rental unit to help cover your mortgage in a high-rate environment. Just keep in mind that you cannot use these units for short-term rentals like Airbnb. It has to be a long-term residence.
We’ve been an Ontario Mortgage Broker for over 35 years, and we know that every borrower is different. Whether you are in Richmond Hill or Hamilton, the key is to look at the total cost of borrowing, not just the lowest rate. With the OSFI LTI cap now in effect, lenders are watching their portfolios closely. They are limited on how many mortgages they can give out that exceed 4.5 times your gross income. This makes having a broker on your side even more important because we know which lenders have room in their portfolios and which ones don’t.
Summary: What This Means for You
The 2026 housing market forecast isn’t a reason to panic, but it is a reason to be prepared. If you’re a buyer, you have more leverage than you’ve had in a decade. If you’re a seller, you need to be realistic about pricing and timing. The new $1.5 million insured cap and 30-year amortization options are tools you should use to your advantage. Don’t let the headlines scare you away from a solid long-term investment.
Got questions? Contact us today or call 905-455-5005. No pressure, no obligation.
Frequently Asked Questions
Why is Ontario the only province with falling home prices?
Ontario, specifically the GTA, is dealing with a significant amount of inventory in the condo sector and muted sales in expensive urban centers. High interest rates have impacted the most expensive markets the hardest, leading to a divergence from the rest of Canada where prices remain more resilient.
Can I buy a $1.2 million home with less than 20% down?
Yes, as of December 15, 2024, the insured mortgage cap was raised to $1.5 million. You can now buy a home at this price point with a minimum down payment of 5% on the first $500,000 and 10% on the portion between $500,000 and $1,499,999.
Is the mortgage stress test still required for renewals?
As of November 21, 2024, the stress test is not required for straight, stand-alone uninsured renewal switches between federally regulated lenders. This allows homeowners to move to a different lender at renewal to find better rates without having to re-qualify at the higher stress test rate.
Who qualifies for a 30-year insured mortgage?
The 30-year amortization for insured mortgages is available to all first-time home buyers, regardless of the property type they are purchasing. It is also available to any buyer, regardless of their status, who is purchasing a newly constructed home in Canada.
About the Author: Aman Harish in
Aman Harish is a Principal Broker at Canadian Mortgage Services. With over 14 years of experience in the Canadian lending industry, Aman specializes in helping homeowners and buyers develop proactive renewal strategies and optimize their debt structure in challenging economic climates. His commitment is to ensuring clients not only secure the best rates but also build long-term financial resilience.
