Canada’s housing market will continue to cool in 2025 due to trade tensions, economic uncertainty, slower population growth and increasing unemployment. Home prices are expected to fall around 2%, with larger drops in Ontario and British Columbia as buyers and developers take a wait-and-see approach. Affordability remains a major issue and new construction is slowing. Rental markets are easing slightly as more supply comes online and demand softens. A gradual recovery is expected in 2026 as trade tensions ease and economic conditions improve.

Highlights

• Trade tensions and slower population growth are contributing to a likely modest recession in 2025, dampening business and consumer confidence and slowing housing activity.
• Home prices are expected to fall 2% in 2025 with larger drops in Ontario and British Columbia. Developers are delaying projects due to high costs, weak demand, and uncertainty.
• A gradual recovery in the housing market is expected in 2026 as trade frictions ease, economic confidence improves and economic growth resumes.

https://www.cmhc-schl.gc.ca/observer/2025/summer-update-2025-housing-market-outlook