1. The Original 2026 Outlook (What Was Expected Before the Conflict)
When CREA released its January 2026 forecast, the consensus was cautiously optimistic. CREA projected that 494,512 properties would trade hands via MLS nationally in 2026, a 5.1% increase from 2025, led largely by Ontario and BC each forecast to see sales rise more than 8%, given the greater room for recovery after deep slowdowns. The national average home price was forecast to rise 2.8% to $698,881 for the year.
At the GTA level, TRREB forecast GTA sales in the range of 60,000 to 70,000 transactions, with the average price ranging between $1 million and $1.03 million. Elevated supply was expected to keep price growth in check, particularly in the condo segment. Average selling prices were anticipated to be lower year-over-year in the first half of 2026 before stabilizing in the second half if buyers stepped off the sidelines.
The thesis underpinning all of these projections was pent-up first-time buyer demand, triggered by the Bank of Canada holding steady at 2.25% and signalling in October 2025 that rates had found their floor.
2. What Changed: The TD Economics Downgrade (March 26, 2026)
Your instinct to question the original forecasts is well-founded. The most significant updated projection came from TD Economics just two weeks ago.
TD Economics no longer expects any growth in Canadian home sales or prices in 2026. It now forecasts a 1.8% year-over-year decline in national home sales and a 0.3% drop in average prices, a steep reversal from its December projection of a 9.3% sales gain and 4.1% price increase.
The downgrade lands hardest on Ontario. TD previously expected Ontario home sales to rise 13%. Ontario is now expected to see 3.2% fewer transactions, while prices are projected to fall 4% in the province compared to a 0.6% gain that had been forecast in December.
TD's economist Rishi Sondhi attributed the downgrade to weaker-than-expected activity in Q4 2025 carrying into Q1 2026, amid a subdued economy, heightened uncertainty and ongoing cost-of-living pressures. He noted the market may need most of the year to make up ground lost in Q1.
Critically for your context, Sondhi specifically cited the surge in oil prices amidst Middle East conflict as a new risk factor since his December forecast. He cautioned that a broader or more prolonged escalation could "support activity in oil-producing regions but weigh more heavily on oil importers" — a direct negative for Ontario and BC, which are net oil consumers. He added that CUSMA negotiations also loom large for the broader economy and housing market.
Notably: CREA's next quarterly forecast update is scheduled for April 16, 2026, just over a week from now. Expect that update to reflect the same deterioration TD has already priced in.
3. Fixed Mortgage Rates: The 30 BPS Move You Referenced
You're correct that fixed rates have risen approximately 30 basis points. Here's the mechanism:
The 5-year fixed mortgage rate has increased by about 0.30% due to a rapid rise in oil prices, which has raised persistent inflation risk. The 5-year Government of Canada bond yield has eased to around 3.0% following U.S. Fed comments that it would look past oil-induced inflation for now but fixed mortgage rates are freshly higher as bond yields rose in response to inflation risk.
On March 18, 2026, the Bank of Canada held its overnight rate at 2.25% for a third consecutive decision, signalling it is waiting for more clarity on how rising geopolitical tensions especially in the Middle East will affect inflation and economic growth. As of late March, the lowest insured five-year fixed mortgage rate had risen to approximately 3.89%, up from 3.79% in February, while Big Bank posted rates sat around 4.29%.
Non-bank lenders led the latest round of rate increases, with some raising 3- and 5-year fixed rates by as much as 30 basis points. Even 1-year rates began to rise, with mortgage brokers noting that the move is being driven more by global forces than domestic data.
The concern going forward: fixed mortgage rates are expected to rise slightly amid ongoing volatility in the government bond market caused by high government debt and international conflicts. The BoC noted an expanded range of economic outcomes due to global instability, with trade tensions and regional conflicts acting as a "critical link" that keeps inflation elevated while stifling business growth.
4. Live GTA Market Data: What's Actually Happening Now
March 2026 — TRREB Data (Released April 7, 2026 — Yesterday)
GTA REALTORS reported 5,039 home sales in March 2026 up 1.7% compared to March 2025. New listings totalled 14,442, down 16.7% year-over-year. The MLS HPI Composite benchmark was down 7.4% year-over-year. The average selling price came in at $1,017,796, down 6.7% compared to March 2025. On a month-over-month seasonally adjusted basis, selling prices remained relatively flat.
The interpretation from TRREB itself: TRREB Chief Information Officer Jason Mercer noted that if market conditions continue to tighten as they did in March, selling prices could start levelling off as we move through the remainder of 2026. However, positive news on trade and geopolitical issues would be needed to meaningfully improve consumer confidence and lift home sales in the months ahead.
February 2026 — GTA Detail (Most Recent Full Dataset)
The GTA's benchmark home price for February 2026 was $938,800, down 7.9% year-over-year but up 0.3% month-over-month. The average home sold price in the GTA came in at $1,008,968 down 7.0% year-over-year. The GTA's sales-to-new-listings ratio improved to 36.1%, up from January's 28.6%, but remained below the 40% threshold that would signal a balanced market. GTA detached homes averaged $1.33 million, down 8.3% year-over-year; condos averaged $627,000, down 8.9% year-over-year.
National HPI Trend
Nationally, the MLS HPI fell 0.6% month-over-month and was down 4.8% year-over-year as of February 2026. CREA's Senior Economist Shaun Cathcart noted that while activity was starting to pick up toward the end of February, some first-time buyers may continue to hold off, waiting for a price bottom in Ontario and BC.
5. Absorption Rates: The Local Oakville/Halton Temperature
Based on data from Martin Group's own local tracking as of early April 2026, the Oakville market is showing a clear property-type divergence:
As of April 2, 2026, detached homes saw HPI dip (-2.2% for 1-storey and -1.2% for 2-storey), yet absorption rates for detached properties climbed to 17.8% suggesting buyers are stepping in as prices adjust. Townhomes entered near-balanced territory with absorption rates jumping to over 25%, with price gains of 0.7%. The apartment/condo segment remains firmly in buyer's territory with an 11.5% absorption rate and prices up 2.1% offering buyers both selection and time to negotiate.
A general market reference point: nationally, absorption below 45% on the sales-to-new-listings ratio reflects buyer's market conditions. According to CREA, a buyer's market corresponds to a sales-to-new-listings ratio of 45% or below, while a seller's market begins below 3.6 months of inventory. The GTA's 36.1% SNLR and Oakville's 17.8%–25% absorption rates both confirm that buyers have meaningful leverage in most segments today with townhomes being the exception trending toward balance.
6. The Big Picture for Your Market (Oakville / $1M–$2M+)
Putting it all together, here is the market picture as you head into spring 2026:
Headwinds in play:
- Fixed rates rose ~30 bps due to geopolitical shock and oil-driven bond yield pressure
- TD Economics has formally slashed Ontario's 2026 outlook to a 3.2% sales decline and 4% price drop
- GTA HPI is down ~7–8% year-over-year, with further softness expected in H1
- Consumer confidence is constrained by Middle East uncertainty, U.S. tariff risk, and CUSMA negotiations
- Canada's population declined in 2025 for the first time since Confederation, softening rental demand and dampening investor activity in the GTA
Tailwinds in play:
- Bank of Canada holding at 2.25% keeps variable rates stable, some buyers locking in now before any potential hike later in 2026
- New listings fell 16.7% year-over-year in March, tightening available supply
- March GTA sales rose 1.7% year-over-year, the first positive year-over-year sales signal in several months
- Townhomes in Oakville are pushing into balanced territory (25%+ absorption), meaning the mid-market is strengthening
- Old Oakville and premium lakefront enclaves remain comparatively insulated from broader weakness
The spring read: The consensus among TRREB, TD, and CREA is that spring 2026 is a critical inflection point. If geopolitical and trade signals stabilize, pent-up buyer demand, particularly in the $1M–$1.5M freehold move-up category could materialize more quickly than current numbers suggest. If oil prices remain elevated and fixed rates trend further upward, the recovery gets pushed deeper into H2 2026 or into 2027. CREA's next formal forecast update on April 16 will likely quantify the same downgrade TD already made. Watch that release closely.
For Martin Group listings in the $1.65M–$3M range: Buyers in this segment are not rate-sensitive in the same way first-time buyers are but they are confidence-sensitive. The psychological backdrop of a geopolitical conflict and rising rates matters. Pricing accurately against current comparables, and positioning listings to close before any further fixed rate drift, is the correct strategy this spring.
