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Canada could return to 2019 levels of housing affordability—but getting there will take a major boost in homebuilding.

New estimates show that between 430,000 and 480,000 new homes need to be built each year over the next decade to meet demand and bring affordability back on track. That’s nearly double the current pace of construction across the country.

While this goal is achievable, it won’t happen without major changes. A larger, more modern workforce increased private investment, faster approvals, fewer delays, and lower development costs will all play a part. Innovation in building technology and better productivity in the construction sector are also key.

Some experts suggest that even building 400,000 homes annually could make a big difference, but challenges like a shrinking construction workforce and slow productivity will need to be addressed.

Where are the biggest housing shortfalls?

The provinces with the most pressing housing gaps include Ontario, Nova Scotia, and British Columbia—places that saw rapid price increases during the pandemic. In these areas, supply simply hasn’t kept up with population growth and demand.

Among Canada’s largest cities, Montréal currently has the biggest housing gap. Without a significant increase in building, affordability issues there are expected to get worse.

Toronto would need to boost construction by 70% over the next decade to ease affordability pressure. While rental building has grown, there’s a shortage of homes that match what people can afford to buy.

In Vancouver, 7,000 more homes a year—29% more than current trends—are needed. The good news: last year, over 33,000 homes were started, putting the region on the right track.

Calgary has seen record construction in recent years but still needs about 45% more homes annually to meet growing demand.

Ottawa-Gatineau also faces a large housing gap. Though building increased between 2021 and 2023, supply hasn’t kept up with rising demand.

On the flip side, Edmonton is in a good spot—current projections show enough homes will be built there to maintain affordability by 2035.

The spring 2025 update on Calgary's housing market is here, giving us a look at how things are shaping up so far this year—and what might be ahead. The latest outlook builds on the forecast from January, with fresh insight into home sales, prices, and the economic trends influencing the market.

So far this year, home sales have slowed a bit more than expected. That’s largely due to economic uncertainty making some people a bit cautious. But it’s important to keep things in perspective—sales are still stronger than they were during the tougher times between 2015 and 2019, and more in line with long-term norms.

On the supply side, we’re seeing an increase thanks to a wave of new home construction over the past few years—especially in higher-density developments like condos and townhomes. A lot of these are aimed at the rental market, but they’re also helping ease some of the pressure in the resale market by giving buyers and renters more options. In fact, the number of homes available for resale has doubled compared to last year, bringing inventory levels closer to what’s considered normal.

Naturally, when more homes are available and fewer are selling, some start to worry about a possible downturn. But we’re really just moving from a seller’s market—like we’ve seen over the past few years—to one that’s more balanced, and in some areas, even slightly favouring buyers.

More choice means some cooling in prices, especially in certain areas and home types. For example, apartment-style homes may see prices dip around two percent this year, while row homes could see a one percent drop. Detached homes, on the other hand, are expected to hold steady, since demand is still strong in areas where supply is limited.

While there’s still some uncertainty in the short term, strong population growth and a solid job market in Calgary are helping keep things on stable ground. Looking ahead, how policies around energy and the environment play out will also be important for the future of the housing market beyond 2025.

Cottage country homes in Ontario are experiencing longer listing times than usual, reflecting broader trends of cooling in Canada’s recreational real estate market. A shift away from the intense demand seen during the pandemic has led to a more balanced and cautious environment for both buyers and sellers.

Analysts suggest the urgency that defined the market during lockdowns—when remote work and travel restrictions fueled a surge in vacation home purchases—has now eased. With more economic uncertainty in 2025, buyers are proceeding more cautiously, and sellers are adjusting to a less aggressive market.

Prices have moderated in many regions, with some areas in Ontario seeing declines of over 20 per cent since 2024. Inventory levels remain steady, with expectations of increased listings during the summer months. Approximately 40 per cent of cottage markets may experience further price drops, though the remaining 60 per cent could see modest increases due to lingering demand and limited available properties.

After years of double-digit price growth, property values in the recreational market have generally stabilized, settling slightly below previous peaks. In Ontario, the median price for a single-family recreational home fell 1.5 per cent last year to $640,700, while condos declined by 5.7 per cent to $468,900. A marginal recovery is anticipated in 2025, with forecasts predicting a one per cent increase in single-family home prices and a 1.8 per cent rise nationally.

Despite increased inventory in some regions, demand has not significantly rebounded, even with lower interest rates. Additionally, regulatory restrictions on short-term rentals in certain areas may be discouraging investment in vacation homes.

Survey data indicates that nearly one in five Canadians planning to sell a recreational property within the next year no longer sees it as a strong investment. This shift in sentiment underscores the changing dynamics of the cottage real estate market as it moves away from the volatility of recent years.

In May 2025, home sales across Canadian MLS® Systems saw a 3.6% increase compared to the previous month—the first national gain in activity since November 2024. This uptick was largely driven by strong markets in the Greater Toronto Area (GTA), Calgary, and Ottawa. While it's just one month of positive momentum, it could signal a shift in the market. The recovery many were expecting in 2025 may have simply been delayed by earlier economic uncertainty and challenges, including the effects of tariffs. Although it’s still early, the latest data hints that things may be starting to turn around.

New listings also rose in May, helping to maintain a healthy balance between buyers and sellers. The ratio of sales to new listings held steady, pointing to continued stability in the market.

Despite the monthly bump in sales, activity remained slightly lower than in May of last year. Home prices held fairly steady, with the national average just below where it stood a year ago. After several months of declines, prices appear to be leveling off—another sign the market might be finding its footing.

Inventory levels continued to normalize, with just under 202,000 properties listed for sale by the end of the month. That’s a notable increase from last year, though still a bit below the long-term average. The number of months of inventory on the market was in line with historical norms, suggesting conditions remain balanced.

Real estate activity picked up noticeably in the second half of May and is expected to carry into June. As always, buyers and sellers should keep in mind that national trends don't always reflect what’s happening locally. For the best guidance, it's a good idea to connect with a trusted REALTOR® in your area.

A new report from the Canada Mortgage and Housing Corporation (CMHC) reveals a major downturn in the condo markets of Toronto and Vancouver, following years of rapid growth. Since mid-2022, sales of new, resale, and pre-construction condos have plummeted, driven largely by higher interest rates and shrinking investor appetite. By early 2025, condo sales in Toronto had dropped 75%, while Vancouver saw a 37% decline compared to the peak in 2022.

Despite the slowdown, developers have continued building, flooding the market with new supply. In 2024, a record 25,572 condo units were completed in Toronto and 12,442 in Vancouver. This has led to a severe oversupply, especially in Toronto, where it would now take nearly five years to sell the current inventory at the current pace. As a result, prices have come under pressure—falling 13.4% in Toronto and 2.7% in Vancouver since 2022.

Investors, who once drove much of the demand, are now feeling the squeeze. Higher mortgage costs, stagnant price growth, and tighter financing conditions have significantly eroded returns. In Toronto, investors who bought pre-construction units in 2024 could face capital losses of up to 6% by the time their units are ready. At the same time, the cost of carrying investment properties has risen faster than rental income—up 24% in Toronto and 29% in Vancouver—further reducing profitability.

In response to these market challenges, project cancellations have surged. Over half of Toronto’s pre-construction condos remained unsold in Q1 2025, leading to a fivefold increase in cancellations since 2022. Lenders, reluctant to finance projects without strong pre-sales, have pushed developers to pivot toward rental housing instead.

While the current glut has temporarily eased housing costs for buyers and renters, CMHC warns this relief may be short-lived. With fewer projects being built today, the pipeline of future housing is shrinking—setting the stage for renewed shortages down the line.

After a year of steady interest rate cuts that began in April 2024, the Bank of Canada held its key overnight rate at 2.75% for the second meeting in a row on June 4, 2025, signaling a more cautious, wait-and-see approach.

In its latest update, the Bank highlighted ongoing uncertainty around U.S. trade policy. The current U.S. administration continues to raise and lower tariffs—most recently doubling tariffs on steel and aluminum to 50%—with the possibility of further trade actions ahead.

Canada’s economy grew by 2.2% in the first quarter—slightly better than expected—driven mainly by a short-term boost in exports and businesses stockpiling inventory in anticipation of tariffs. However, the Bank expects that momentum to fade in the second quarter, as those temporary factors unwind and domestic demand remains weak.

There are also signs of strain. Consumer confidence has dipped, and the housing market is cooling, with a sharp drop in home resales. The labour market has softened too, particularly in sectors tied to trade, pushing unemployment up to 6.9%.

Inflation, as measured by the Consumer Price Index eased to 1.7% in April, largely due to the removal of the federal consumer carbon tax. Excluding that, inflation rose slightly to 2.3%, above expectations. Business surveys suggest many companies plan to pass rising costs from tariffs on to consumers—indicating more inflation may be on the way.

With mixed signals from the economy, the Bank’s Governing Council chose to hold rates steady while closely monitoring trade developments and their broader impact. Key concerns include the effect of tariffs on exports and employment, how quickly price increases are passed on to consumers, and how inflation expectations evolve.

The Bank also flagged another challenge on the horizon: upcoming COVID-era mortgage renewals, which could strain household budgets as a larger share of income goes toward interest payments.

Despite these uncertainties, the Bank reaffirmed its commitment to maintaining price stability and supporting sustainable economic growth. Its next interest rate decision and updated economic outlook are scheduled for July 30, 2025.

Airdrie
May sales in Airdrie improved over the previous month but remained below last year’s levels, contributing to a 10% year-to-date decline. However, the 772 sales recorded so far align with long-term trends. Rising new listings have pushed the sales-to-new listings ratio down to 58%, indicating more balanced market conditions compared to last year’s tight market. Inventory reached 468 units—the highest May level since before the pandemic—largely due to increased new construction. This added supply is putting downward pressure on prices, with the benchmark price dipping to $540,600, nearly 1% below last month and 2% below last year.

Cochrane
After a strong start to the year, Cochrane’s May sales dropped 17% from last year, pulling year-to-date activity just below 2024 levels. A surge in new listings brought the sales-to-new listings ratio down to 55%, boosting inventory to 293 units—more in line with historical norms. The months of supply approached three, slowing price growth. Still, the benchmark price rose to $589,400, up nearly 4% year-over-year.

Okotoks
New listings spurred a jump in May sales, with a sales-to-new listings ratio of 74%. However, inventory levels remain tight and are still 28% below long-term averages. Limited supply has kept months of supply below two and continues to support price growth. The benchmark price rose to $633,900—up from last month and over 2% higher than last year.

In May, Calgary's total residential sales declined by 17% compared to the same month last year, largely due to a sharp drop-in apartment condominium activity. Despite the year-over-year decrease, the 2,568 sales recorded are still 11% above long-term May averages and showed improvement over April.

New listings continued to rise faster than sales, boosting inventory levels. However, months of supply remained stable at 2.6, indicating relatively balanced market conditions. While sales are easing and inventory is growing—a trend seen in many cities—the shift toward balance is helping reduce upward pressure on prices. This marks a contrast with some larger cities where housing markets were already under strain before current economic headwinds.

Inventory gains are uneven across the city, with some areas experiencing excess supply and others still facing shortages. Detached and semi-detached home prices have stayed relatively stable and remain above last year’s levels. In contrast, row and apartment-style homes saw modest price declines due to increased supply from both new construction and the rental market. The overall unadjusted residential benchmark price in Calgary was $589,900 in May, slightly lower than the previous month and more than 2% below May 2024.

In the detached market, listings rose—particularly for homes priced over $600,000—while sales slowed across most price points. This led to more balanced conditions and stable prices. The city-wide benchmark price stood at $769,400, up 1% year-over-year. However, areas like the North East are seeing price declines due to elevated supply.

For semi-detached homes, May brought 428 new listings and 256 sales, leading to a sales-to-new listings ratio of 60%. Inventory growth was modest, and months of supply held just above two. The benchmark price reached $697,300—up nearly 3% from last year—with the strongest pricing trends in tighter districts like the North West.

Row home sales remained above long-term norms despite a pullback from last year’s record highs. Inventory reached over 1,000 units for a second consecutive month, putting downward pressure on prices. The benchmark price dropped to $453,600—down nearly 2% from May 2024.

The apartment condominium segment saw the most notable slowdown, with sales falling to 579 units—down from 907 last year. While new listings also dipped, they still outpaced sales, pushing months of supply to 3.6. Increased rental and new-build supply is contributing to softer demand and prices, which declined to $335,300—down from last month and over 1% lower than last year.

Traditional expectations of retirement—downsizing to a smaller home, living mortgage-free, and enjoying a simpler life—are shifting for many Canadians, according to a recent survey. Nearly half of those planning to retire in the next two years have no plans to downsize, revealing a generational divide over what homeownership looks like in retirement. While 46 per cent still plan to move into smaller properties, many are opting to stay put due to economic factors, lifestyle preferences, and emotional ties to their current homes.

For those who do choose to downsize, condos are the most popular option, followed by adult lifestyle communities and smaller detached homes. However, lifestyle features tend to influence decisions more than property type. Retirees prioritize single-level layouts, proximity to healthcare and amenities, being close to family and friends, and conveniences like maintenance services and covered parking.

One of the most notable shifts is the increasing number of retirees carrying mortgage debt into retirement. By 2026, 29 per cent of Canadians retiring will still have mortgage payments—more than double the 14 per cent reported in 2016. This change reflects broader housing trends, such as high real estate prices and delayed market entry. Many retirees are choosing to maintain mortgage payments if it allows them to remain in a beloved home or help adult children enter the housing market.

The survey also points to delayed life milestones. More first-time homebuyers are over the age of 35, and the average retirement age has climbed to 65.3 in 2024, up from 64.3 in 2020. Today’s retirees are adapting to new financial realities and lifestyle goals, showing greater flexibility than previous generations when it comes to housing and debt in their later years.

In April 2025, Canada’s housing market showed signs of stabilizing after months of declining home sales, according to the latest figures from the Canadian Real Estate Association. National home sales remained virtually unchanged from March, halting a downward trend that had persisted since late 2024. Despite this pause, sales volumes were still nearly 10% lower compared to the same month a year earlier, with around 44,300 homes sold across the country.

The number of newly listed properties declined slightly by 1% in April, while total active listings rose 14.3% year-over-year to approximately 183,000. However, this figure remains below the historical average of 201,000 for this time of year. This increase in inventory has pushed the national sales-to-new listings ratio to 46.8%, indicating a balanced market by industry standards.

Home prices continued to slide, with the MLS® Home Price Index falling 1.2% month-over-month and 3.6% year-over-year. The national average sale price dropped to $679,866, down nearly 4% from April 2024. However, these national figures mask considerable regional differences. High-priced markets in Ontario and British Columbia experienced more significant price declines, while prices in more affordable regions such as the Maritimes, Quebec, Manitoba, and Saskatchewan have shown growth.

Inventory levels also vary widely across regions. Major urban centers like Toronto and Vancouver are seeing 10- to 15-year highs in available homes, whereas parts of the Prairies and the East Coast are still facing tight supply conditions.

While national averages suggest a cooling market, local dynamics remain diverse. Economic uncertainty and regional disparities continue to shape buyer and seller behavior, highlighting the importance of analyzing market trends on a local level rather than relying solely on national data.

Calgary’s housing market is facing a growing affordability crisis, with homeownership increasingly out of reach for many potential buyers. While Calgary remains one of the more affordable major cities in Canada, its residential real estate market has surpassed the threshold of what is considered affordable. According to the Canada Mortgage and Housing Corporation (CMHC), housing is considered affordable when a household spends less than 30% of its pre-tax income on mortgage, property tax, and utilities. In Calgary, this number has been above 40% for the past three years, signaling a shift away from affordability.

To address this, industry experts gathered at a summit to explore solutions for keeping housing within reach for residents. A central point of discussion was the need to increase the housing supply. However, the challenges are more complex than simply building more homes. The primary issues involve the long timelines and high costs associated with land development. Shortening construction times and reducing costs are key factors in making homes more affordable.

One of the main drivers of Calgary’s affordability crisis is the shortage of available land and the rising costs of development. Land prices in Calgary, while lower than those in cities like Vancouver and Toronto, still put pressure on affordability. Experts agree that urban expansion, the densification of older neighborhoods, and a more competitive land market are necessary to address the affordability issue.

Additionally, there is a shortage of skilled labor in Alberta’s construction industry, partly due to an aging workforce. Solutions such as targeted immigration policies and specialized training programs are seen as essential for meeting housing demand. Further complicating the issue is the need for significant investments in infrastructure like water systems, transit, and power to support new housing projects.

To mitigate the impact of rising development costs, there is a push for new funding models, including grants to developers to help offset infrastructure costs. This would reduce the financial burden on taxpayers and speed up the development process.

Addressing Calgary’s housing affordability crisis will require a multifaceted approach, combining urban expansion, more efficient building practices, and targeted financial support for developers. Without these efforts, homeownership may continue to move further out of reach for many residents.

The Toronto housing market continued to cool in April, with home prices falling as buyers gained more leverage amid sluggish demand. The average selling price across the region dropped by 4% compared to the same time last year, landing at around $1.1 million. Despite a slight month-over-month uptick in sales of 1.8%, the market remains far below last year’s activity, with total home sales down 23% annually. This marks one of the weakest Aprils for sales since 2010, excluding the pandemic-affected spring of 2020.

The increase in available listings—up 8.1% year-over-year to nearly 19,000—has outpaced the number of homes sold, pushing the sales-to-new-listings ratio to just under 30%. This shift highlights a buyers’ market, where supply exceeds demand, and purchasers have more options and bargaining power. Prices, which had been relatively steady in recent months, are now facing clearer downward pressure as sellers become more flexible in negotiations.

All property types saw notable price declines over the past year. Condominiums experienced the sharpest annual price drop at 6.8%, followed by detached homes (5.4%), semi-detached properties (4.1%), and townhouses (3.9%). Condos also led in terms of sales declines, with a steep 30% drop, while sales of detached and townhomes decreased by 21% and 23%, respectively.

Uncertainty around the broader economy and job security continues to weigh on buyer confidence. Many potential purchasers are hesitant to make major financial commitments without a clearer outlook. Although mortgage costs have eased slightly, hopes for deeper interest rate cuts were dampened when the Bank of Canada opted to keep rates unchanged in April.

Forecasts from TD Bank suggest that condo prices could fall between 15% and 20% from their peak in late 2023, with much of that decline occurring through 2025. While lower home prices and softer borrowing costs may improve affordability for some, the overall housing market is expected to remain subdued in the near term, as both buyers and sellers wait for more economic stability.