Harpinder Virk

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.