CMHC's 2026 Housing Market Outlook: What It Means for Kelowna and Okanagan Real Estate
Canada's federal housing agency, CMHC, releases an annual Housing Market Outlook that gives us one of the most comprehensive looks at where residential real estate is headed across the country. The 2026 edition is out, and it paints a picture that's relevant to every buyer, seller, investor, and homeowner in the Okanagan right now.
Let me break down what's in the report and what I think it means specifically for people making housing decisions in Kelowna and the broader Central Okanagan.
The National Economic Backdrop
The CMHC report opens with a stark economic reality: Canada's GDP is projected to grow by just 0.7% in 2026, which CMHC describes as one of the weakest years in recent decades outside of a recession. US tariffs introduced in 2025 continue to create headwinds for Canadian exporters, and many businesses are holding back investment as a result.
For housing, this translates into continued buyer caution. CMHC notes that elevated price-to-income ratios, higher carrying costs than during the pandemic era, and lingering job market uncertainty are keeping many potential buyers on the sidelines. High unemployment and modest income growth are also dampening household spending broadly.
That said, CMHC isn't calling for a housing crash. The language is one of caution and slow recovery, not collapse.
What CMHC Is Forecasting for BC
Here's where it gets especially interesting for us in the Okanagan. CMHC specifically calls out British Columbia alongside Ontario as one of the provinces expected to lead a temporary national home sales rebound in 2026. The reason given is important: both provinces had some of the weakest home sales in decades recently, which means there's pent-up demand that needs to be released.
Put plainly, when markets have been suppressed for a meaningful period of time — as BC's has been since the rate hikes of 2022-2023 — buyers who have been waiting don't stay on the sidelines forever. CMHC anticipates that BC's market will see some recovery in 2026, driven partly by this pent-up demand.
On prices, CMHC expects BC prices to grow modestly in 2026, partly influenced by newly completed higher-priced condominiums lifting the provincial average. The overall price picture is one of stabilization and modest appreciation, not the significant declines some headlines have been forecasting.
However, CMHC also notes that housing starts in BC are expected to drop sharply through the forecast period, reaching historically weak levels. High construction costs and weaker demand have developers cautious about breaking ground on new projects, particularly condominiums where pre-construction sales have been sluggish.
The Rental Market Signal
For anyone considering an investment property or thinking about the rental market, CMHC's rental outlook is worth noting. The report points to more balanced rental conditions nationally as new rental supply comes online and immigration-driven demand slows. Higher vacancy rates and slower rent increases are expected, which gives renters more flexibility — but also means income investors need to underwrite rental projects more conservatively than they might have two years ago.
In Kelowna specifically, our rental market has been tight for several years. A more balanced rental environment doesn't mean rents are collapsing — it means the extraordinary rent growth of recent years is moderating, which is actually healthy for the long-term stability of the market.
The Kelowna Lens
What CMHC's national and provincial data doesn't fully capture is the specific character of the Okanagan market. Having worked in this market through multiple cycles, I can tell you that Kelowna continues to punch above its weight in terms of demand from interprovincial migration, retirees relocating from higher-cost cities, and remote workers who want a better lifestyle without paying Metro Vancouver prices.
The pent-up demand CMHC references nationally is very real here. There are buyers who have been waiting for the right moment — watching rates, watching prices, waiting for a signal. The combination of a stable price environment, improved affordability from rate cuts, and more inventory than we've had in years creates a compelling window.
Whether you're a first-time buyer, an investor thinking about long-term Okanagan real estate, or a homeowner wondering about timing a move, the context from CMHC gives us a clearer view of the road ahead.
Have questions about what this means for your home or investment? Contact us:
Mark Coons, BBA, CE
REALTOR® | eXp Realty Kelowna
Team Lead, Selling Okanagan Group
Relocated to Kelowna in 2018
📞 778-946-6454
📩 [email protected]
