News - Canadian housing construction is expected to decrease until 2028.

The Canadian housing market is preparing for a challenging period as the Canada Mortgage and Housing Corporation (CMHC) forecasts a notable slowdown in new home construction. According to CMHC's latest Housing Market Outlook, housing starts are expected to decline significantly from 2026 to 2028, falling below the historical 10-year average due to a combination of factors. High construction costs, reduced housing demand, and increasing inventories of unsold homes are creating a perfect storm likely to hinder new construction activities nationwide. Despite federal initiatives to boost housing supply, the anticipated course reveals a considerable downturn in the pace of building. Purpose-built rental housing leads new housing starts, maintaining its role as the primary driver of construction. However, its pace is anticipated to slow as the housing market reaches a more balanced state and immigration-driven demand decreases. Construction projects for single-detached, semi-detached, and row houses might experience a gradual upward trend, especially in the Prairies, Ontario, and British Columbia. These areas are seeing some growth in single-family home construction, though broader affordability issues and uncertain job market conditions will likely moderate demand. The condominium sector presents a different picture. In Toronto and other urban centers, condo construction is expected to remain stagnant, with pre-construction sales hitting multi-decade lows. Developers are now focusing on completing existing projects rather than starting new ones. While Ontario is projected to hit historically low housing start levels by 2026, followed by a slight recovery, British Columbia is also facing a significant decline in new starts. In contrast, the Prairies are expected to maintain relatively stable construction activities. Meanwhile, Quebec is predicted to see only minor declines during this forecast period. Economic growth in Canada is projected to be modest at approximately 0.7 percent this year, marking 2026 as one of the slower economic years in recent memory outside traditional recession periods. Although a recession is not currently included in CMHC's baseline forecast, the agency has emphasized geopolitical tensions and economic uncertainties as risks that could further intensify the housing market slowdown.