Harpinder Virk

Increasing the use of Canadian wood products may facilitate up to a 17% decrease in ground-oriented housing costs and about 3.5% more housing starts annually.

Key Highlights

• Since 2025, residential construction costs have increasingly been driven by tariff-affected products such as steel, aluminum and manufactured building components. Before that, wood, plastics and composites products largely drove cost price inflation.
• U.S. tariffs on Canadian lumber and transformed wood products may leave more wood available in Canada, creating an opportunity to better use our domestic resources to lower the cost of building homes.
• Ground-oriented housing (detached houses and townhouses) stands to benefit the most. These homes use far more wood products than high-rise apartments and have become increasingly difficult to build in many markets.
• Realizing this opportunity will require better east-west transportation links and continued efforts to reduce internal trade barriers.

What if the latest U.S. tariffs ended up lowering housing construction costs in Canada? While this may sound counterintuitive, new CMHC analysis suggests that tariffs on Canadian lumber and transformed wood products could create an opportunity to build some homes more affordably.

If more Canadian wood products stayed in Canada and were used more consistently across the country, construction costs for ground-oriented housing could fall by as much as 17% in some centres. This would include costs for detached houses and townhouses. Such a change in building habits may lead to an increase of 3.5% in annual ground-oriented housing starts across the country, or close to 4,000 more starts annually. In centres like Calgary, the increase would be close to 8%, while in Toronto and Ottawa it would be about 4.5%.

The number of home sales recorded over Canadian MLS® Systems fell by 2.3% month-over-month in September 2026.

“After a four-month run of modestly positive progress on demand, supply, and prices, many of Canada’s housing markets took a step back in September. This was hardly surprising given the latest jump in fixed mortgage rates, and with the Bank of Canada now widely expected to follow with a rate hike before the end of the year,” said Shaun Cathcart, CREA’s Senior Economist. “With housing affordability already stretched, the big question going forward is how much farther will the Bank have to go to keep a lid on inflation next year? Until that becomes clearer, this fresh round of uncertainty will likely send some buyers back to the sidelines.”

September Highlights:

• National home sales declined by 2.3% month-over-month.
• Actual (not seasonally adjusted) monthly activity came in 7.7% below September 2025.
• The number of newly listed properties fell by 1.8% on a month-over-month basis.
• The MLS® Home Price Index (HPI) edged down by 0.4% on a month-over-month basis and was down 3.4% year-over-year.
• The actual (not seasonally adjusted) national average sale price was down 1.6% on a year-over-year basis in September 2026.

The 2024 Canadian Housing Survey offers a detailed look at Canadians’ housing experiences and how they shape everyday life. This article highlights selected findings from the newly released 2024 results, focusing on future housing aspirations, core housing need and self-reported experiences of housing discrimination.

Key Highlights

• Homeownership is a goal for most renter households, but nearly 3 in 10 (28%) said that buying a home is not important to them. Homeowners are generally satisfied with the number of bedrooms they have, while renters would like to have more bedrooms than they currently have.
• Between 2022 and 2024, core housing need remained largely unchanged, with renters continuing to face much higher rates than homeowners.
• Households in the primary rental market face higher core housing need than those in the secondary market. Unsuitability caused 9.7% of core housing need cases in the primary rental market, compared with 3.2% in the secondary market.
• One-person households (20.4%) had the highest rate of core housing need among household types. Indigenous households reached 20.1% in 2024, underscoring ongoing housing challenges among key population groups.1
• Racialized people were 3 times more likely than non-racialized people to report housing discrimination. More than one-third of Black homeowners reported experiencing housing discrimination in their lifetime.

• Canada has not been immune to the recent rise in global bond yields, which reflects a more challenging backdrop for fiscal and monetary policy. These higher yields (which underpin fixed mortgage rates) are likely already impacting Canada’s housing market, with sales declining for the first time in six months in August.
• With the forces behind the climb in rates set to linger, we’ve upgraded our forecast for bond yields through next year, relative to our prior forecast in June. This upgrade comes even under our baseline assumption that the Bank of Canada remains on hold through 2027 amid near-target underlying inflation and an expected gradual easing in crude oil prices.
• Accordingly, our near-term forecasts for growth in Canadian home sales and average home prices have been downgraded. Canadian home sales are tracking a decline of about 5% this year and are unlikely to recover this lost ground in 2027. Although we still see roughly flat Canadian average home price growth this year, next year prices will likely expand at a sub-2% pace.
• While housing is likely to remain subdued in 2027, our projections envision positive (albeit modest) quarterly growth in both Canadian home sales and average prices. Even so, home sales are likely to remain well below pre-pandemic levels through next year. Anticipated quarterly gains are likely to be supported by the further release of pent-up demand. Job markets are also forecast to improve gradually, although the outlook has been downgraded relative to our prior projection due to the recent escalation in the Canada-U.S. trade conflict. Perhaps most crucially, this forecast depends on some downdrift in Canadian bond yields beginning in the fourth quarter and lasting through next year.

Highlights

• Canada’s supply gap is broadly unchanged from last year. Relative to our 2025 estimate, the supply gaps narrowed in Toronto and Calgary and remained unchanged in Vancouver. However, the supply gaps have widened in Ottawa and Montréal.
• Construction is expected to slow faster than demand, leaving Canada short of the roughly 417,000 to 469,000 homes needed each year to restore pre-pandemic affordability by 2036.
• Not building enough during the current housing downturn is a key risk. Near-term affordability improvements since 2023 may be difficult to sustain if housing construction does not keep pace with future demand. Although rental market conditions have eased, ownership supply is facing significant challenges.

Canada's housing market is entering a new phase. We see slower population growth, more balanced rental markets, improving affordability and elevated housing completions in many cities. However, the key risk is that Canada does not build enough during today’s market softening and falls short of housing when demand strengthens again. That would leave Canada significantly behind the 417,000 to 469,000 homes needed each year to restore pre-pandemic affordability by 2036.

• Consistent with our national forecast, we’ve embedded upgrades to 2026 real GDP growth across most provinces. That said, the drivers of these boosts vary, with a solid Q2 boosting Ontario, oil production lifting regions like Alberta, and investment supporting B.C. 
• Regional growth divergences are set to widen into 2027 as tariffs, export bans, and higher energy prices create a clear divide between commodity-producing and manufacturing-oriented provinces. Alberta, Saskatchewan, and Newfoundland & Labrador are benefiting from stronger oil prices through higher incomes, profits, and government revenues. In addition, they’re relatively insulated from trade disruptions thanks to commodity exemptions and more diversified export markets. In contrast, Ontario, Quebec, Nova Scotia, and New Brunswick face a double headwind from disproportionate tariff exposure and higher energy costs, with few offsetting benefits from the commodity price upswing.
• Federal and provincial governments have rolled out new waves of support in response to escalated trade frictions, including loan programs, wage subsidies, grants and EI enhancements. These measures should provide some offset to new external shocks.
• Recent better-than-expected employment gains have pushed unemployment rates lower across most provinces, though softer hiring next year is expected to slow further improvement. At the same time, sharply weaker population growth – including outright declines in Ontario, Quebec, B.C., Manitoba, and Newfoundland & Labrador – will restrain both labour force gains and upward pressure on jobless rates.
• Renewed conflict in the Middle East has pushed WTI oil back to the $100/bbl mark and reinforced a source of uncertainty for the economic outlook. Alberta, Saskatchewan, and Newfoundland & Labrador are benefiting through sizable revenue windfalls, energy-sector incomes and profits. Elsewhere, higher prices are a net drag.
• The combination of rising yields and downgraded economic activity underpins broad-based downgrades to growth in home sales and average home prices. On the latter, B.C. and Ontario are an exception, where compositional forces (i.e. stronger sales growth in more expensive properties) are supporting average prices. This trend is likely to persist in the near term. 

High interest rates are affecting mortgage choices at renewal in Canada. More households are choosing variable-rate and shorter-term mortgages, increasing their exposure to future interest-rate changes.

Key Takeaways

• Recent interest-rate volatility has highlighted how quickly mortgage costs can change for many Canadian households when mortgages come up for renewal.
• Canadians are increasingly choosing variable-rate mortgages and shorter fixed-rate terms, changing their exposure to future interest-rate movements.
• Mortgage term choices do more than affect borrowing costs. They influence how interest-rate risk is distributed across households and the broader financial system.
• As economic uncertainty increases, decisions about mortgage terms may become more important for households' financial resilience.

The average asking rent for a two-bedroom apartment across all census metropolitan areas (CMAs) combined was $2,130 per month in the second quarter of 2026, down 3.6% from the second quarter of 2025.

These findings are from the Quarterly Rent Statistics program for the second quarter of 2026. These new data are compiled for CMAs across Canada's 10 provinces.

In the second quarter, asking rent for a two-bedroom apartment decreased year over year in many CMAs, such as Abbotsford–Mission (-6.4%), Calgary (-6.4%), Montréal (-5.2%) and Vancouver (-4.1%); however, it increased year over year in other CMAs, such as Thunder Bay (+6.5%), Sherbrooke (+5.7%), Halifax (+5.3%) and Saskatoon (+5.2%). Average monthly asking rent was highest in Vancouver ($3,030), Toronto ($2,650), Victoria ($2,640) and Halifax ($2,400).

Where available, the concept of paid rent has been added to the estimates from the first quarter of 2019 onward. While asking rent refers to the price posted on major rental listing platforms, paid rent reflects the current amount paid by existing renters, typically based on a formal lease agreement and, if applicable, subsequent rent increases. Paid rent estimates for the second quarter of 2026 are available for 18 CMAs.

In the second quarter, the average asking rent for a two-bedroom apartment was higher than the average paid rent in almost all CMAs where both figures were available. The only exceptions were Calgary (asking rent of $1,890 per month and paid rent of $1,930 per month), Regina (asking rent of $1,480 and paid rent of $1,580) and Edmonton ($1,570 each). Average monthly paid rent for a two-bedroom apartment was highest in Vancouver ($2,470) and Toronto ($2,160) in the second quarter.

The number of home sales recorded over Canadian MLS® Systems decreased by 0.7% on a month-over-month basis in August 2026. Monthly activity has now remained largely unchanged since May.

“Sales activity and price trends were largely unchanged for a fourth consecutive month in August,” said Shaun Cathcart, CREA’s Senior Economist. “What has changed is the broader economic environment, with the Bank of Canada recently warning of rising inflation risks, along with doubts about the durability of recent economic growth. For borrowers, fixed mortgage rates have already increased on higher bond yields. Meanwhile, on the variable rate side, a rate hike is not only back on the table for this year but already priced in by markets. This fresh round of incoming headwinds is expected to dampen the prospects for further housing market momentum heading into 2027.”

August Highlights:

• National home sales fell by 0.7% month-over-month.
• Actual (not seasonally adjusted) monthly activity came in 6.9% below August 2025.
• The number of newly listed properties climbed 3.3% on a month-over-month basis.
• The MLS® Home Price Index (HPI) was unchanged on a month-over-month basis and was down 3% year-over-year.
• The actual (not seasonally adjusted) national average sale price was up 0.6% on a year-over-year basis in August 2026.

New listings rebounded by 3.3% on a month-over-month basis in August 2026, reversing three straight declines earlier in the summer.

On Wednesday, September 2, 2026, the Bank of Canada held its overnight lending rate steady at 2.25% where it has now remained for almost a year. This move was widely expected by analysts.

Gross Domestic Product (GDP) grew by 3.3% in the second quarter, while the unemployment rate edged down to 6.4% in July. Combined with persistently high oil prices, the risk of broader inflationary pressures and the potential impact of Canadian counter-tariffs taking effect September 8, these factors could shift the probability back towards a potential rate hike in the not-too-distant future.

Inflation fears around the world are once again already causing financial conditions to tighten. The Bank noted that, “long-term bond yields have moved up globally, including in Canada,” which means borrowers are already facing higher fixed mortgage rates, similar to what happened back in March and April 2026.

The Bank of Canada today held its target for the overnight rate at 2.25%, with the Bank Rate at 2.5% and the deposit rate at 2.20%.

The continuing conflict in the Middle East is keeping energy prices high. As well, new US tariffs and Canadian counter-measures have been announced following the breakdown of trade talks between Canada and the United States. Both situations remain fluid.

In the United States, economic growth continues to be solid, driven by consumer spending and AI-related investment. Growth in the euro area was stronger than expected in the second quarter, while China’s economy slowed. Overall, the global economy has shown resilience in the face of geopolitical headwinds, with growth broadly consistent with the July Monetary Policy Report (MPR) projection. With still-high oil prices and elevated margins for refined energy products, inflation in most countries remains high.

Financial conditions have tightened since July. Long-term bond yields have moved up globally, including in Canada. The Canadian dollar has appreciated slightly on US-dollar weakness.

As expected, Canadian economic activity strengthened in the second quarter, with GDP up by 3.3%, following very weak growth in the first quarter. While some of the recent strength reflected temporary factors, the pick-up in activity was broad-based. Consumption showed solid gains. Following several weak quarters, there was some rebound in housing activity. Exports and business investment were up sharply. Labour market conditions have improved in recent months, with the unemployment rate edging down to 6.4% in July. Still, demand for labour remains subdued and indicators point to continued excess supply in the economy.

Nationally, housing sales increased in July and new listings continued to decline. Market conditions tightened from June to July according to the sales-to-new listings ratio and months of inventory. The MLS HPI edged up modestly from June to July, its first monthly increase in 20 months.

The number of national sales reported by the Canadian Real Estate Association increased by 0.5% (sa) from June to July, a fourth consecutive monthly rise. Over this 4-month period, sales have risen by a cumulative 7.2% (sa), which is equivalent to a 23% annualized pace. Nearly 55% of the local markets we track saw sales rise from June to July, with strongest increases observed in Kingston (8.4%; sa), Brantford (6.2%) and St. Catharines (6.1%). Compared to the same month in 2025, sales fell 5.3% (nsa) in July, with annual declines recorded in 84% of the local markets we monitor, with the largest ones observed in Charlottetown (PEI; -19.2%), Lethbridge (-16.4%) and Thunder Bay (-14.7%).

National new listings declined by 1.6% (sa) from June to July, still on their downward trend that started in summer 2025. In July, new listings were 6.9% (nsa) weaker than their level in the same month of 2025. From July 2025 to July 2026, new listings declined in just above 2/3 of our tracked local markets, with the largest declines observed for Fraser Valley (-22.3%), Okanagan-Mainline (-20.7%) and Barrie (-19.7%).

Almost all (89%) feel confident they can spot fraud, but more than half (52%) admit to risky behaviours.

As fraud attempts continue to rise across Canada, a TD survey reveals a growing disconnect between confidence and behaviour – one that may be leaving Canadians more exposed than they realize. While most Canadians polled believe they can identify scams, many are still engaging in risky habits that could increase their vulnerability.

Key findings from this TD survey:

• 46% of Canadians encounter scams or fraud attempts weekly or even daily
• Nearly one-quarter (24%) say they or a family member have been the victim of financial fraud or scams in the past year
• 89% feel confident in their ability to spot fraud
• 52% admit to behaviours that could make them more vulnerable to fraud, including:
• Using public Wi-Fi to access personal or financial accounts
• Opening email attachments from unknown senders
• Clicking links in texts or emails before verifying the source
• Downloading apps or software from unfamiliar sites
• 41% say they never consult resources or educate themselves on fraud prevention

The number of home sales recorded over Canadian MLS® Systems climbed a further 0.5% on a month-over-month basis in July 2026, marking a fourth consecutive monthly gain.

“At the national level, July’s housing data was a carbon copy of the June numbers, with home sales edging up a little further, listings down, and prices remaining stable,” said Shaun Cathcart, CREA’s Senior Economist. “The more interesting story over the last few months has been below the surface of the headline national numbers, where markets across the country are generally moving back towards balance. That’s true on the Prairies, in Quebec, and on the East Coast, where a majority of sellers’ markets have been steadily cooling off over the past year. More recently, it’s also been true of the markets in B.C.’s Lower Mainland and Ontario’s Greater Golden Horseshoe, where formerly buyers’ or borderline buyers’ markets have largely shifted back into balanced market territory.”

July Highlights:

• National home sales edged up 0.5% month-over-month.
• Actual (not seasonally adjusted) monthly activity came in 5.3% below July 2025.
• The number of newly listed properties declined 1.6% on a month-over-month basis.
• The MLS® Home Price Index (HPI) edged up 0.1% month-over-month and was down 3.3% on a year-over-year basis.
• The actual (not seasonally adjusted) national average sale price was up 0.2% on a year-over-year basis in July 2026.

In this article, the Canadian Housing Statistics Program (CHSP) is releasing data on investors (i.e., owners of at least one residential property that they do not use as their principal residence) in the residential housing market by investor size. Concentration in the residential housing market is analyzed for the 2022 reference year in Prince Edward Island, Nova Scotia, New Brunswick, Ontario, Manitoba and British Columbia.

Highlights

• Small-scale investors (individuals) owned the largest share of investment properties in terms of assessed value across all the provinces studied, except Nova Scotia, where institutional investors, or the top 0.1% of investors in terms of the value of investment properties owned in the province, owned the largest share of investment properties.
• Of the six provinces studied, institutional investors owned 0.1% (Prince Edward Island and Manitoba) to 0.4% (Ontario) of the total stock of houses. The category “houses” includes single-detached houses, semi-detached houses, row houses and mobile homes.
• Among rental properties (investment properties not for personal use), 16.6% of their assessed value was owned by institutional investors in Prince Edward Island, compared with 38.0% in Nova Scotia.
• More than half of the total assessed value of rental properties built since 2011 were owned by institutional investors in Nova Scotia (63.1%) and New Brunswick (61.5%).
• In all 12 census metropolitan areas (CMAs) analyzed, the results showed a non-concentrated and potentially competitive rental market in CMAs and their census subdivisions (CSDs). Toronto and Vancouver had the least concentrated markets.

This report is the second annual release of the New Housing Market Report series, following the initial 2024 release. Data collection was expanded to Alberta in the second half of 2025, and the results are included in this report. Data collection will be expanded to Ontario in 2026, followed by Quebec at a later stage. List and sale prices, as well as other housing characteristics, were collected for new single-detached houses, semi-detached houses, row houses and condominium apartment dwellings (including low- and high-rise condominium apartments, stacked townhomes, duplexes, and triplexes).

National highlights

Slower pace for the new home market: Nationally, the number of for-sale housing starts (for homeowner and condominium intended markets) declined 10% year over year in 2025. This decrease in starts, along with the 35% yearly increase (December 2025) in the inventory of completed and unabsorbed units, indicated a slower housing market in 2025 compared with 2024.

Living area

Single-detached houses in the range of 1,500 to 2,000 square feet were most commonly reported in most of the CMAs covered in 2025. New single-detached houses were the most common dwelling type in 2025 in all CMAs outside British Columbia covered by this report. In the British Columbia CMAs, condominium apartments were the most popular. Units in the range of 500 to 1,000 square feet were most common in the CMAs where condominium data were available.

Summary

• Home sales in Canada rose by 0.5 % from May to June, the third increase in a row following five months of decline.
• New listings decreased by 1.3% from May to June, following a 0.9% decrease the previous month.
• Active listings increased by 0.5% in June, the second growth in three months.
• The number of months of inventory (active listings-to-sales ratio) remained unchanged at 4.8 during the month, following the first decline for this indicator since October 2025 in May.
• Market conditions tightened in June in many provinces but remained balanced at the national level, which largely reflects conditions in Ontario and B.C. that remain soft, while markets in all other provinces continue to favour sellers.
• Housing starts decreased by 14.1K from 253.1K in May to 239.0K in June (seasonally adjusted and annualized), a print below the consensus calling for 255.0K. The pullback was concentrated in urban areas (-13.3K to 227.8K), although rural starts also edged lower (-0.8K to 11.1K). Within urban areas, the multi-unit and other segment accounted for most of the decline (-10.2K to 189.9K), while single-detached starts also decreased (-3.1K to 37.9K). Among the major CMAs, starts rose in Vancouver (+4.2K to 23.8K), but declined sharply in Toronto (-12.4K to 25.4K) and more moderately in Calgary (-3.9K to 28.1K) and Montreal (-1.9K to 35.4K)
• The Teranet–National Bank Composite National House Price Index^TM declined by 0.4% from May to June on a seasonally adjusted basis. Six of the eleven CMAs included in the index posted declines during the month: Vancouver (-1.4%), Victoria (-1.2%), Calgary (-0.8%), Edmonton (-0.8%), Winnipeg (-0.6%), Ottawa-Gatineau (-0.5%), and Toronto (-0.3%). Conversely, prices rose in Hamilton (+3.2%), Quebec City (+0.7%), and Halifax (+0.6%), while they remained stable in Montreal.

Housing sales (in units) increased nationally for a third consecutive month in June while new listings declined, thereby tightening market conditions modestly from May to June according to the sales-to-new listings ratio. The national (all-markets) MLS HPI stayed flat from May to June; the first time it did not post a monthly decline since February 2025.

National housing (unit) sales increased 0.5% (sa) from May to June, a third consecutive monthly rise. Sales rose by a cumulative 7% (from sa figures) over this 3-month period but, in June 2026, were still 12% (sa) below their November 2024 level, as global trade tensions started rising shortly after the U.S. elections. From May to June, nearly 60% of the local markets we track posted a rise in their sales, with the strongest ones observed for Sudbury (21.2%), Peterborough (14.8%) and Kingston (13.1%).

National new listings declined by 1.3% (sa) from May to June, still following their (mild) downward trend that started in September 2025. Sharpest monthly declines in this indicator were observed for St. John’s (NL; -17.5%), Sudbury (-10.3%) and Victoria (-8.5%). New listings declined by 1.4% (nsa) over the 12-month period ending with June 2026.

The national sales-to-new listings ratio tightened further from May to June, edging up 0.9 percentage point to 50.2%, which is still in the lower half of our estimated range for balanced conditions, where it had been trending since Spring 2022. Since the same month in 2025, this ratio tightened by 1 percentage point, but with only about 45% of tracked market also showing a tightening.

Canada Mortgage and Housing Corporation (CMHC) has been conducting its annual Mortgage Consumer Survey since 1999 with a one-year exception during the pandemic. The survey brings valuable insights on mortgage consumers’ thoughts, attitudes and behaviours regarding homeownership and the process of obtaining a mortgage.

This year, a total of 4,112 mortgage consumers were surveyed between January 7 and February 1, 2026. The interviews were conducted in both English and French, and included Canadians aged 18 or over in every region of the country who:

• are the prime decision makers in their households; and,
• had undertaken a mortgage transaction in the past 18 months.

Key highlights

1. Respondents continue to be confident about their purchase being a good long-term investment, though fewer believe the value of their home will increase over the next 12 months compared to last year.
2. It took homebuyers an average of 4.4 years to save for a down payment, mainly driven by first-time homebuyers taking longer at 4.7 year.
3. Savings and equity from previous home continue to be the main components of down payments. However, 23% of homebuyers (13% of repeat buyers and 27% of first-time homebuyers) surveyed said they received a financial gift to contribute to their down payment. 
4. There was a significant decrease in mortgage consumers who were concerned about defaulting on their payments, down to 39% from 53% in 2025.
5. Renewers were more likely (35%) to say they experienced increased financial pressure due to changes in interest rates, with their mortgage payments increasing on average by $375 a month.
6. Mortgage consumers are leveraging the use of AI (16% of those who did online research) to help with their information gathering

The number of home sales recorded over Canadian MLS® Systems edged up a further 0.5% on a month-over-month basis in June 2026. This builds on the 5.5% jump recorded in May and the 0.9% increase in April, placing national activity some 7% above where it stood in March.

“June’s housing numbers continued to build momentum following the late start to the year in May, with virtually every metric moving in the right direction,” said Shaun Cathcart, CREA’s Senior Economist. “Looking ahead, fixed mortgage rates have eased from their peak in April, and rate hikes from the Bank of Canada this year are much less likely than they were just a month ago. This is good news for borrowers. Additionally, home prices are no longer falling in most of the markets where they were previously, which had likely been keeping a lot of buyers waiting on the sidelines. As such, we continue to expect the second half of the year to be quite a bit more active than the first half, similar to sales activity in 2024 and 2025.”

June Highlights:

• National home sales edged up 0.5% month-over-month.
• Actual (not seasonally adjusted) monthly activity came in 0.9% above June 2025.
• The number of newly listed properties declined 1.3% on a month-over-month basis.
• The MLS® Home Price Index (HPI) was unchanged month-over-month and was down 3.6% on a year-over-year basis.
• The actual (not seasonally adjusted) national average sale price was up 0.5% on a year-over-year basis in June 2026.

The Bank of Canada today held its target for the overnight rate at 2.25%, with the Bank Rate at 2.5% and the deposit rate at 2.20%.Canada’s economy is showing signs of improvement. Growth is picking up and inflation is projected to ease gradually from its recent spike. There are still important risks and uncertainties related to the war in the Middle East and US trade policy.

Since the April Monetary Policy Report (MPR), global economic prospects have been dented by higher oil prices stemming from the Middle East conflict. At the same time, the build-out of artificial intelligence (AI) is supporting economic activity in a growing number of countries. Oil prices are still lower than their peak in April but the situation in the Middle East remains volatile. The path for global inflation is highly dependent on how the conflict unfolds.

The US economy is growing at about 2½%, mostly because of strong consumption and booming AI investment. China’s economy is expanding solidly thanks to robust exports. Economic activity in the euro area has been weighed down by high energy prices, but is expected to strengthen in the second half of the year if energy prices come down as anticipated.

The Bank projects global GDP growth will slow to 2¾% in 2026, mostly because of the effects of the Middle East conflict, and recover to around 3¼% in 2027 and 2028.

Increased supply and slower demand have eased asking rents, bringing Canada’s major rental markets toward more balanced conditions. However, trends vary by segment, including building age and rent level. Conditions are expected to continue easing as new units take longer to be absorbed and competition from rental condominium apartments increases. This is creating short-term imbalances in newer, higher-priced segments.

Highlights

• Asking rents declined due to increased supply and slower population growth, while average rents for occupied units continued to rise.
• Vacancy increases are mostly concentrated in new supply, where landlord-provided incentives support absorption.
• Rental markets are easing as new completions take longer to absorb, while competition from rental condominium apartments in certain markets is creating a short-term imbalance between supply and demand in new, higher-priced segments.
• Conditions remain very tight in the lowest rent quartiles in most markets, implying little improvement in affordability.
• Tenant mobility is highest in more expensive units and more limited in lower-rent segments, despite recent gains in turnover.
• Rental demand is expected to grow, even with much lower population growth.

This article examines homeownership among recent immigrants to Canada and their pathways leading up to homeownership. It combines information from the Canadian Housing Statistics Program on homeowners in seven provinces—Prince Edward Island, Nova Scotia, New Brunswick, Ontario, Manitoba, Alberta and British Columbia—with immigration data for individuals who were admitted as permanent residents from 2017 to 2021. This is the second in a series of articles published in Housing Statistics in Canada that investigate homeownership among newcomers to Canada.

Key findings

• From 2018 to 2021, the homeownership rate increased for recent immigrants and decreased for Canadian-born individuals. In Ontario, the homeownership rate for recent immigrants in the fifth year after admission rose from 35.7% in 2018 to 40.2% in 2021, while it fell from 50.7% to 47.8% for Canadian-born individuals.
• By their fifth year after admission to Canada, economic-class immigrants had homeownership rates comparable to those of Canadian-born individuals. In British Columbia, economic-class immigrants in their fifth year after admission had a homeownership rate of 40.1%, compared with 43.3% for Canadian-born individuals.
• By their fifth year after admission to Canada, recent immigrants in the Maritime provinces and Manitoba had homeownership rates similar to those of Canadian-born individuals. The homeownership gap between recent immigrants and Canadian-born individuals was larger in Ontario, Alberta and British Columbia.
• Immigrant homeownership rates varied significantly by province and by region of the world in which immigrants were born.
• Recent immigrant homebuyers had lower incomes but purchased more expensive homes than Canadian-born buyers. This difference may be associated with higher mortgage debt and lower retirement savings among recent immigrant homebuyers.

• The soft start to the year for the Canadian economy appears broad-based, underpinning 2026 real GDP growth downgrades across provinces, particularly in Ontario, B.C. and parts of the Atlantic. The picture is better in per capita terms, with positive growth expected across all provinces this year, led by Newfoundland and Labrador.
• A rebound in employment in May offered a modest lift to labour markets after a soft first quarter, but data volatility continues to cloud the underlying trends. Population growth is slowing sharply, with outright declines in Ontario, Quebec, and B.C. leading to smaller labour forces. This should help cap increases in unemployment, even as hiring slows to a near-standstill.
• The U.S.-Iran conflict has lifted global energy prices, providing a meaningful revenue and income boost to oil- producing provinces—particularly Alberta and Newfoundland and Labrador. Prices are expected to moderate through the back half of the year as Middle East tensions ease, though the outlook is highly uncertain. Higher fuel costs are weighing on households and businesses, especially in Central Canada.
• Provincial budget season has wrapped up, with deficits and net debt (both as a share of GDP) set to rise in aggregate this year. While FY 2026/27 program spending is set to gear down across provinces, weighing on GDP, committed public capital spending plans remain an important source of support. New initiatives were targeted rather than transformative, including measures such as the removal of the PST on groceries in Manitoba and tax cuts for businesses and new home purchases in Ontario. 
• Canadian home sales in the second quarter are tracking broadly in line with our prior projection, led by Ontario, while price growth is somewhat stronger. We continue to expect a gradual recovery through next year, with modest improvements in Ontario and B.C. (supported by pent-up demand), partly offset by cooling activity in other regions amid scant population growth.
• The July 1 CUSMA review deadline is nearing, but timely renewal looks unlikely as talks have yet to pick up. Trade uncertainty remains elevated as the U.S. stays committed to tariffs. Ontario, Quebec, and B.C. are most exposed given their reliance on manufacturing and trade. Still, exemptions for CUSMA-compliant goods have left Canada facing relatively low effective tariff rates, helping support export recoveries in most provinces.

• 2026 tournament could add up to C$6.5 billion to Canada's quarterly GDP
• Tourism, hospitality and consumer spending expected to drive the majority of economic boost, contributing up to C$5 billion
• Incremental growth to lift quarterly GDP by approximately 0.1 percentage points in mid‑2026

As millions of fans turn their attention to North America for the world's largest international soccer tournament, an economic boost of up to C$6.5 billion is expected in incremental quarterly GDP for Canada according to a new report from BMO Economics.

Running from June 11 to July 19, the tournament will feature 48 teams and 104 matches across North America, with Toronto and Vancouver hosting games in Canada.

"Mega sporting events of this scale don't transform economies overnight, but they do create a meaningful surge in demand over a concentrated period," said Douglas Porter, Chief Economist, BMO. "In Canada, tourism, accommodation, food services and local entertainment stand to benefit most – particularly in the host cities."

The number of home sales recorded over Canadian MLS® Systems increased 5.5% on a month-over-month basis in May 2026.

“The national sales increase from April to May was broad-based but driven disproportionately by Ontario, suggesting the HST rebate on new builds may have only briefly drawn the attention of buyers away from the existing home market,” said Shaun Cathcart, CREA’s Senior Economist. “While it was just the first month in 2026 to see any meaningful upward momentum in headline demand, under the surface conditions have been improving for some time. Sellers’ and buyers’ expectations are increasingly aligned, as evidenced by tightening sale-to-list price ratios and shorter periods between listing and sale dates. As a result, prices have largely stabilized following some softness earlier in the year.”

May Highlights:

• National home sales jumped 5.5% month-over-month.
• Actual (not seasonally adjusted) monthly activity came in 5.1% below May 2025.
• The number of newly listed properties edged down 1% on a month-over-month basis.
• The MLS® Home Price Index (HPI) inched down by 0.1% month-over-month and was down 4.1% on a year-over-year basis.
• The actual (not seasonally adjusted) national average sale price was up 1.5% on a year-over-year basis in May 2026.

Amid rising concern about housing affordability for younger Canadians, this article investigates the housing market outcomes of millennials compared with Gen-Xers and baby boomers at a similar age (25 to 39 years). Using Census of Population data from 1991, 2006 and 2021, this article examines shifts in the housing market outcomes of each generational cohort in relation to moving out of the parental home, forming families and homeownership status.

Key findings

• In 2021, the share of millennials aged 25 to 39 living in a census family with parents (16.3%) was around twice the share of baby boomers of the same age in 1991 (8.2%). This trend has occurred gradually over time and is common to the large cities studied.
• After accounting for those living with their parents, millennials had the lowest rate of homeownership (49.9%), compared with Gen-Xers (56.2%) and baby boomers (55.9%) when they were aged 25 to 39 years.
• Fewer millennials aged 25 to 39 were married with children (26.6%) compared with Gen-Xers (34.5%) and baby boomers (46.6%) when they were the same age―the household type with the highest rate of homeownership historically.
• Millennial homeowners, after accounting for those living with their parents, were less likely to live in single-detached houses relative to earlier generations, especially those living in Toronto and Vancouver.

The Bank of Canada today held its target for the overnight rate at 2.25%, with the Bank Rate at 2.5% and the deposit rate at 2.20%.

The conflict in the Middle East is now in its fourth month. The resulting increases in energy prices and disruptions in global supply chains are weighing on global economic growth and pushing up inflation. At the same time, the US administration continues to propose new tariffs and trade policy uncertainty remains elevated.

In the United States, economic growth remains solid, supported by consumption and AI‑related investment. In the euro area, growth is subdued, with higher energy prices weighing on activity. China’s economic growth continues to be supported by strong exports.

Canadian financial conditions have loosened since the April Monetary Policy Report. Global equity markets have been buoyant and bond yields remain volatile. The Canadian dollar has weakened against the US dollar and other currencies.

In Canada, GDP edged down by 0.1% in the first quarter, weaker than expected at the time of the April MPR. Consumer spending grew 1.4% but government spending unexpectedly declined. Housing activity also declined and business investment remained weak. Exports fell while imports rose strongly as inventories were rebuilt. Employment was up in May, but looking through monthly volatility, employment in Canada is little changed since the start of the year. The unemployment rate continues to fluctuate in the 6 ½%-7% range with the most recent reading at 6.6% in May.

Key developments in Canada’s residential mortgage market in 2025 and the outlook for 2026:

• In 2025, the mortgage market activity was dominated by renewals of existing mortgages, rather than new mortgages taken out by homebuyers.
• Renewal volumes are expected to ease in 2026. Borrowers renewing after a 5-year term are likely to face a similar interest-rate shock as those who renewed in 2025.
• Insured mortgage activity increased compared to uninsured lending. New eligibility rules made it easier for first-time homebuyers and new home buyers to qualify for mortgage insurance.
• The national 90+ days mortgage delinquency rates increased in 2025. The increase was largely concentrated in Ontario, especially Toronto, where households faced growing payment pressures.
• Despite the increase, 90+ days delinquency rates remain low by recent standards. Delinquencies on non-mortgage products – often a predictor of mortgage defaults – are rising but at a slower pace.
• Canada’s residential mortgage debt exceeded $2.4 trillion in December 2025, reaching a new high.
• Overall, borrower stress is increasing due to softer labour-market conditions and accumulated exposure to higher interest rates. The system is more rate-sensitive, but remains structurally stable.

Key trends to watch

The following factors may influence the performance of Canada’s residential mortgage market in the coming years:

• Upcoming renewal cycles, particularly borrowers rolling into new rates through 2026–27.
• Labour market conditions, given their close relationship with arrears.
• Shifts in insured mortgage activity, including amortization trends and eligibility effects.
• Performance of nonbank lenders, especially where borrower profiles differ from banks.

• Home sales in Canada edged up by 0.7% from March to April, the first increase in six months.
• New listings increased by 4.1% from March to April, following stabilization the previous month.
• Active listings increased by 2.7% in April, the third increase in four months.
• The number of months of inventory (active listings-to-sales ratio) edged up from 5.1 to 5.2 during the month, its highest level since April 2019 (excluding the pandemic).
• Market conditions loosened slightly in April but remained balanced at the national level, which largely reflects soft conditions in Ontario and B.C., while markets in all other provinces continue to favour sellers.
• Housing starts increased by 39.6K from 239.7K in March to 279.3K in April (seasonally adjusted and annualized), a print well above the consensus calling for 245.0K. This rebound was driven by a pickup in urban areas (+37.8K to 265.6K), while rural areas also edged higher (+1.8K to 13.7K). The increase in urban areas was concentrated in the multi-unit segment (+39.7K to 229.1K), while the single-detached segment edged lower (-2.0K to 36.5K). Housing starts rose sharply in Toronto (+19.1K to 37.4K) and Vancouver (+4.7K to 25.8K), while they declined in Calgary (-5.7K to 14.9K) and Montreal (-1.7K to 28.0K).
• The Teranet–National Bank Composite National House Price fell by 0.7% from March to April on a seasonally adjusted basis. Six of the eleven CMAs included in the index recorded declines during the month: Winnipeg (-2.3%), Calgary (-1.2%), Toronto (-1.1%), Vancouver (-0.7%), Montreal (-0.5%), and Hamilton (-0.3%). Conversely, prices rose in Halifax (+2.4%), Ottawa-Gatineau (+1.1%), Victoria (+0.4%), Edmonton (+0.1%), and Quebec City (+0.1%).

CANADA HOUSING MARKET: EXISTING HOME SALES INCREASED IN APRIL, BUT TOO SOON TO SHOUT ‘RECOVERY’

Housing sales increased nationally in April after five months of consecutive declines. But both indicators of market conditions we report suggest still-soft conditions nationally. The MLS HPI for all markets continued to decline in April.

The number of housing sales (in units) increased 0.7% (sa) from March to April, its first monthly rise since October 2025. Sales increased in 17 of the 31 markets we track from March to April, with the strongest increases posted in Barrie (18.8%), St. Catharines (18.2%) and Charlottetown (PEI; 16.6%). National sales declined -4% (nsa) over the 12-month period ending in April 2026. 

In April, national new listings posted a 4.1% (sa) monthly increase with above ¾ of the local markets we track contributing to this rise, with at least 10% increases observed for Quebec City (12.4%), Kitchener-Waterloo (10.5%), Ottawa (10.2%) and Peterborough (10%). New listings also edged up 0.2% (nsa) nationally over the 12-month period ending with April.

With new listings increasing at a faster pace than sales from March to April, the national sales-to new listings ratio (SNLR) was pushed down to 45.6% (sa). This figure is close to our estimated lower bound for the balanced conditions’ range (estimated at 44.7%), and very close to its lowest print since early 2009, when Canada was in a recession. Nearly ¾ of the monitored local markets have seen their SLNR declined from March to April.

The number of home sales recorded over Canadian MLS® Systems was up 0.7% on a month-over-month basis in April 2026.

“While home sales were up only modestly from March to April, the small increase reflected a slow start to the month with a stronger handoff into May, alongside falling days on market and stabilizing prices,” said Shaun Cathcart, Senior Economist with the Canadian Real Estate Association (CREA). “This latest bout of global economic uncertainty and higher mortgage rates means the previously expected rebound in housing markets this year will continue to be muted, but it does not mean there will be no upward momentum at all.”

April Highlights:

• National home sales edged up 0.7% month-over-month.
• Actual (not seasonally adjusted) monthly activity came in 4% below April 2025.
• The number of newly listed properties jumped 4.1% on a month-over-month basis.
• The MLS® Home Price Index (HPI) edged down 0.1% month-over-month and was
• down 4.2% on a year-over-year basis.
• The actual (not seasonally adjusted) national average sale price was up 2.2% on a
• year-over-year basis in April 2026.

Canada’s housing starts made meaningful gains in 2025. Record rental construction and more missing middle housing added important new supply, building on the momentum highlighted in the Fall 2025 Housing Supply Report.

At the same time, ownership-oriented construction weakened overall. Short-term imbalances continued in several markets. Rising unsold inventories suggest today’s supply may not align well with buyers’ needs, while tighter financing conditions and project cancellations threaten future supply.

This report focuses on both sides of that story: where Canada is succeeding in expanding housing options and where further progress is needed to ensure long-term supply and affordability.

Highlights

• Canada’s housing starts rose 6% in 2025, driven by record rental and expanding missing middle construction. Building timelines improved. High completion levels added important supply, especially in Vancouver, Calgary and Edmonton.
• Major vulnerabilities lie underneath this progress. Condominium presales collapsed, unsold inventory surged and financial conditions tightened. These pressures threaten the future pipeline of ownership-oriented housing supply, particularly in Toronto and Vancouver.
• Slower population growth, cautious buyers and elevated construction costs shaped supply decisions, pushing developers towards smaller apartments while limiting family-sized, ground-oriented homes.
• Looking ahead, near‑term supply imbalances are expected to ease as new supply is absorbed, helping affordability in the long run.

CANADA HOUSING MARKET: STILL WAITING FOR A NATIONAL HOUSING MARKET RECOVERY

National housing sales and the MLS Home Price Index continued to decline in March, reflecting continued weakness in market conditions.

The number of national housing sales posted its fifth consecutive monthly decline last month, edging down by -0.1% (sa figures) from its February level, while it declined by -2.3% (nsa) since March 2025. From February to March, sales declined in 17 of the 31 local markets we track. National new listings also edged down by -0.2% (sa) between February and March and posted a -4.9% (nsa) decline since March 2025.

With almost identical monthly declines (in %) in both sales and new listings, the national sales-to-new listings ratio stayed constant at 47.8% (sa) from February to March, still in the lower half of the estimated balanced conditions range. This indicator of market conditions has hovered in this lower-half range since December 2024, and also frequently since Spring of 2022. From February to March and according to this indicator, market conditions eased in 14 of the local markets we monitor and tightened in 17 of them. It also suggests 14 of these local markets were balanced in March and the same number were favouring buyers, all in B.C. and Ontario. Only 3 markets—Regina, Saskatoon and St. John’s (NL)—were assessed as sellers’ favourable.

The other indicator of market conditions we report—months of inventory—stayed unchanged at 5.0 from February to March, very close to its long-term pre-pandemic average of 5.2, hence also suggesting balanced conditions. But despite being essentially balanced at national level, this indicator continues to mask significant divergences across provinces with British Columbia and Ontario showing figures above their long-term average and the other provinces showing below average figures.

The national MLS House Price Index (HPI) declined -0.4% (sa) from February to March, continuing its downward trend that started in the second half of 2023. As in many previous months, all unit types contributed to both the monthly and 12-month declines in the national MLS HPI. Over the 12-month period ending in March of this year, this price index declined -4.7% (nsa). Its trend profile reflects the weakening market conditions mainly coming initially from the lagged effects from the rise in interest rates until Fall of 2023, and subsequently from slower population growth and the rise in global trade and geopolitical tensions since early 2025.

The Bank of Canada today held its target for the overnight rate at 2.25%, with the Bank Rate at 2.5% and the deposit rate at 2.20%.

The evolving conflict in the Middle East is causing heightened volatility and US trade policy continues to reshape global trade patterns. Both are ongoing sources of uncertainty. The Bank’s April outlook assumes tariffs remain unchanged and the global benchmark price of oil declines to US$75 per barrel by mid 2027.

The Iran war has led to sharply higher energy prices and transportation disruptions, diminishing growth prospects in oil-importing countries and boosting inflation worldwide. In the United States, growth is still expected to be solid over the projection horizon, boosted by AI-related investment and consumption growth. China’s economy is being supported by robust exports. In the euro area, higher prices for oil and natural gas will weigh on economic activity.

Financial conditions have been volatile, reflecting daily developments in the Middle East and shifting market expectations for inflation and interest rates. Bond yields are modestly higher since January while equity markets, which weakened sharply at the outset of the war, have recovered. Since the start of the war, the US dollar has appreciated against most major currencies. The Canada-US exchange rate has been relatively stable.

Overall, the global economy is expected to grow by about 3% in 2026, 2027 and 2028. Projections for inflation over the next year are revised up because of the jump in energy prices.