By Sam Kamra

Canadian real estate has traditionally been discussed through a relatively predictable group of factors: interest rates, employment, immigration, housing supply and affordability. In 2026, however, I believe Canadians need to look much further beyond our borders to understand where housing could be heading. Tariffs, international trade disputes, wars, geopolitical instability and weakening consumer confidence are increasingly influencing the decisions people make here at home.

Working in real estate and following housing conditions across both Ontario and Alberta, I have noticed a significant change in the conversations I'm having with buyers and sellers. Buyers are no longer asking only about mortgage rates or whether the Bank of Canada will cut rates again. They are talking about tariffs, Canada's economy, employment security, international conflicts and whether home values have finished correcting. Many buyers simply don't feel the urgency to purchase that existed several years ago, particularly when they believe there is a reasonable possibility that prices could be lower six or twelve months from now.

Tariffs Are Now Part of the Real Estate Conversation

A few years ago, it would have been unusual for tariffs to come up in a conversation about purchasing a house. Today, I hear about them regularly. Buyers understand that a trade dispute between Canada and the United States doesn't remain confined to politicians and corporations. Tariffs can increase costs for businesses, affect investment decisions, disrupt supply chains and potentially influence employment. Those consequences eventually reach the consumer, and consumers are the people buying houses.

The Bank of Canada's consumer research has shown that tariffs and trade tensions remain an important concern for Canadians when thinking about inflation and the economy. This matters because buying a home is probably the largest financial commitment most Canadians will ever make. Someone considering a $500,000, $800,000 or $1-million mortgage isn't only thinking about today's payment. They are thinking about whether their employment will remain secure, whether household expenses will continue increasing and whether the property they purchase today will maintain its value.

Sellers Are Feeling the Financial Squeeze

The pressure isn't limited to buyers. Many sellers are also dealing with an increasingly expensive household budget. Mortgage renewals have resulted in higher payments for some homeowners, while property taxes, insurance, utilities, groceries, vehicle expenses, childcare, condominium fees and general maintenance continue consuming larger portions of household income.

A homeowner doesn't need to be facing foreclosure to become financially motivated to sell. Financial pressure usually develops gradually. Savings decline, discretionary spending gets reduced, credit balances increase and eventually the homeowner begins questioning whether carrying the property still makes financial sense. When that happens across thousands of households, economic pressure can eventually translate into additional housing inventory.

This is particularly important in Ontario, where housing prices reached extraordinary levels during the pandemic-era boom. The Bank of Canada reported in 2026 that the price of a typical Canadian home had fallen approximately 20 per cent from its 2022 peak, with particularly significant declines in Ontario and British Columbia. Toronto's condominium market has experienced even greater pressure in certain segments.

Buyer Psychology Has Changed

One of the biggest changes I see isn't financial at all. It's psychological. During the strongest years of Canada's housing boom, buyers were afraid that waiting would mean paying more. If a property was worth $900,000 today and buyers believed it would be worth $1 million next year, there was tremendous pressure to purchase immediately.

That mentality can work in reverse. When buyers see properties remaining on the market longer, sellers reducing prices and comparable homes selling below previous values, waiting suddenly feels safer. Instead of worrying about being priced out, buyers begin worrying about buying too early.

This is one of the most important questions I hear today: Why should I buy now if I think the same property could be cheaper next year?

Once enough buyers begin thinking this way, lowering interest rates doesn't necessarily create an immediate housing recovery. Rates matter enormously, but housing also depends on employment, income, access to credit and confidence. You can lower the cost of borrowing money, but you cannot force someone to borrow it when they are uncertain about their job or believe the asset they are purchasing may continue declining in value.

Global Wars Are Creating Another Layer of Uncertainty

The increasing number of geopolitical conflicts around the world is adding another level of uncertainty. Wars in the Middle East and elsewhere may be thousands of kilometres from Canada, but their economic consequences can travel quickly through energy markets, international shipping, insurance costs, commodity prices, financial markets and consumer confidence.

This is particularly relevant when comparing Alberta and Ontario. Alberta's economy has a much stronger relationship with energy and commodities, meaning global events affecting oil prices can have very different consequences for Calgary and Edmonton than they do for Toronto. Higher energy prices can provide economic benefits to parts of Alberta while simultaneously increasing transportation and household costs elsewhere in Canada.

The Bank of Canada has itself identified geopolitical developments and Canada's trade relationship with the United States as important risks to its economic and inflation outlook. This creates a complicated environment because economic weakness would normally support lower interest rates, while tariffs, wars and energy shocks can simultaneously create inflationary pressure.

Alberta Is Stronger in Some Areas, but It Isn't Immune

I continue to see Alberta differently from Ontario. Calgary and Edmonton remain substantially more affordable than Toronto and many surrounding GTA communities, and Alberta has benefited from interprovincial migration and comparatively attractive housing economics.

Those advantages could provide Alberta with greater resilience if Canadian housing continues correcting. Someone selling an expensive Ontario property may still look at Calgary or Edmonton and see considerably more house for their money. Investors may also find the relationship between purchase prices and rents more attractive than in Toronto.

However, Alberta isn't isolated from the Canadian or global economy. A significant Canadian recession, prolonged trade conflict, major employment deterioration or global economic shock would eventually affect Western Canada as well. The difference may simply be the degree of vulnerability.

That's why I don't believe there is one Canadian real estate market. A Toronto condominium investor experiencing negative monthly cash flow is in a very different position from someone purchasing a detached home in Calgary, but both are still influenced by employment, borrowing costs, consumer confidence and expectations about the future.

Some Canadians Are Questioning Their Future Here

Another conversation I increasingly hear goes beyond housing. Some Canadians are questioning whether the country continues to offer the affordability, economic opportunity and quality of life they expected. People compare Canada with the United States and other countries when considering housing costs, taxes, employment opportunities, business opportunities and the cost of raising a family.

I wouldn't characterize this as Canadians universally fleeing the country. Canada remains a major developed economy and continues attracting people from around the world. However, I believe the fact that established Canadian families are increasingly having these conversations is important.

Real estate demand isn't simply about population numbers. It also depends on whether working households believe Canada is where they want to invest their savings, establish businesses, raise families and purchase long-term assets. If confidence in Canada's economic future weakens, that can eventually influence housing decisions.

The Biggest Concern Is Everything Happening at Once

My cautious outlook on Canadian real estate isn't based on one tariff, one war, one interest-rate announcement or one month of housing statistics. What concerns me is the accumulation of risks occurring simultaneously: trade uncertainty, geopolitical conflicts, increasing household expenses, mortgage renewals, employment concerns, consumer debt, affordability problems and declining buyer confidence.

Any one of these issues may be manageable on its own. The problem becomes more significant when households experience several at the same time. A homeowner may be able to absorb a higher mortgage payment. A homeowner dealing with a higher mortgage payment, increased household expenses, employment uncertainty and a declining property value faces a much more complicated financial situation.

Ontario and Alberta will not necessarily follow the same path. Ontario, particularly the Greater Toronto Area, remains vulnerable because of extremely high housing costs and pressure within certain investor-heavy condominium markets. Alberta enters this period with stronger affordability and different economic fundamentals, but Calgary and Edmonton are still connected to the broader Canadian and global economy.

Where I Believe Canadian Real Estate Goes From Here

After more than a decade working in Canadian real estate, I have learned that housing markets rarely change direction because of one factor. Major shifts usually happen when economics and psychology begin reinforcing each other, and I believe that is what Canadians should be watching now.

Ontario has already demonstrated how quickly housing psychology can change when buyers stop assuming prices will continuously increase. Alberta currently has important advantages, particularly its relative affordability compared with Ontario and British Columbia, but neither province operates independently from what is happening around the world.

A tariff announcement in Washington can affect Canadian businesses and employment. A conflict in the Middle East can affect oil prices and Alberta's economy. Higher energy prices can affect inflation across Canada. Inflation affects interest rates, employment affects consumer confidence, and confidence ultimately affects real estate.

That chain is why I believe the next stage of Canada's housing market will be determined by much more than the next Bank of Canada announcement.

I remain cautious about Canadian housing, particularly in highly leveraged and investor-heavy markets. That doesn't mean every property will decline or every Canadian city faces the same risks. There will continue to be opportunities in Ontario, Alberta and throughout Canada.

But buyers and sellers should be looking beyond today's listing price and asking a much bigger question: What will Canada's economy, and the world surrounding it, look like over the next several years?

Real estate ultimately depends on employment, income, credit and confidence. When uncertainty begins affecting all four, what happens thousands of kilometres away can eventually arrive at our front door.