Elevated costs, weak demand, and a growing number of unsold homes will bedevil Canada’s homebuilders this year as new home construction will decline through 2028, according to the latest Housing Market Outlook released by Canada Mortgage and Housing Corporation (CMHC).
The report predicts home sales will remain below historical averages and prices will see modest gains this year after falling in 2025. Regional housing markets are expected to vary, with construction and home sales in Ontario and British Columbia recording weaker levels versus their 10-year averages while the Prairies and Quebec will see activity above historical averages.
The report also forecasted Canada’s economy will grow slowly in 2026 based on geopolitical and trade uncertainty, significantly lower population growth, soft labor markets and modest income growth. Growth is projected to improve slowly in 2027 and 2028.
“We expect Canada’s economy to grow slowly in 2026, as many households and businesses remain cautious because of geopolitical and trade uncertainty. This caution is leading many households to delay buying homes and making builders more hesitant to start new projects,” said Kevin Hughes, CMHC deputy chief economist. “These pressures will affect housing markets differently across the country. Stronger local conditions may help support housing market activity in Montreal and Calgary for example, while weaker conditions could further slow housing demand and construction in Toronto and Vancouver.”
