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We started 2025 with a nervous sense of uncertainty, and to change things up a bit, we are starting 2026 with a complete lack of a map.
If last year felt like a "lost year" for real estate, it is because we spent twelve months waiting for a turnaround that never really showed up. Last January, I looked at what 2025 might hold in my post: 2025 Real Estate Market: What Can We Expect?.
Looking back, we got the lower interest rates we wanted, but the "rebound" stayed on the sidelines. Now, as we head into 2026, the honest truth is that we just don’t know yet if things will finally move.
Rates are Down, but the Market is Stuck
This week, the Bank of Canada kept interest rates at 2.25%. While that sounds like good news compared to where we were two years ago, it hasn't sparked a buying frenzy. With the Canadian dollar sitting at $0.74 USD and new trade tariffs affecting our economy, people are being very careful with their money.
We aren't guessing about interest rates anymore. Now, we are guessing if the economy is strong enough for people to actually feel comfortable taking on a mortgage.
Why Everyone is Still "Waiting and Seeing"
Here is the reality of what we are seeing right now:
The Condo Standoff: In places like Toronto, there are more condos for sale than people want to buy. Sellers are still hoping for 2023 prices, but buyers are looking at the economy and saying, "No thanks."
Job Security Matters: Unemployment is at 6.8%. It doesn't matter how low the interest rate is if you’re worried about your job.
Fewer Renters: With new rules cutting down on the number of international students and permits, the rental market has cooled off. For investors, the math just isn't as easy as it used to be.
The Bottom Line
In a market this confusing, being patient is a strategy. 2026 might eventually find its footing, but for now, it is okay to stay on the sidelines. We all want the market to recover, but trying to act like everything is back to normal right now is just wishful thinking.
What do you think? Are you waiting for rates to drop even more, or is it the job market that has you worried? Let me know in the comments!