Canada house prices vs peer countries and why we stand apart

How Canada's house prices have outpaced its peers since 2005

Canadians are acutely aware that housing affordability worsened in recent years. Affordability pressures first emerged in Vancouver in the early 2000s and in Toronto in the early 2010s. They then spread rapidly to other major cities, including Ottawa, Montréal and Halifax.¹

But Canada's story isn't the same as what we see in many other countries. When we look at trends around the world, we can ask a useful question. Is Canada's path part of a wider global trend, or is it driven more by changes at home?

We can also learn from what other countries have done.

How Canada compares with other countries

International comparisons suggest Canada is among countries with the longest periods of housing market growth. This points to a need to examine structural drivers behind ongoing affordability pressures.

When we compare global housing prices over time, 4 main patterns emerge:

• Canada, Australia and Sweden had modest declines during the 2008–2009 global recession, then saw steady house price growth through 2022.
• France and Germany showed consistent, moderate growth with only brief downturns.
• The United States (U.S.) and United Kingdom (U.K.) went through significant corrections during the global financial crisis. Since 2012, their markets have recovered steadily and real prices are now above pre-crisis levels.
• Italy and Japan faced long periods of little or no house price growth, which may be linked to shrinking or aging populations.

Structural factors explain Canada’s housing trajectory

The global financial crisis created very different housing market outcomes across countries. In the United States, house prices fell sharply before eventually recovering. In Canada, prices continued to rise with only a brief interruption.

The key difference is not what happened during the crisis, but rather what happened afterward. Canada's house prices continued to grow rapidly for over a decade, eventually outpacing most peer countries. Even if Canada had experienced a U.S.-style correction, it would still rank among the fastest growing house prices in our international comparison. (see the dotted red line in Figure 1 above) ³

This suggests that the forces behind Canada's affordability challenges developed over many years and cannot be attributed to a single event. Understanding these longer-term drivers is essential to understanding Canada’s high house prices.

How population growth has driven home prices over the past 20 years

Population growth, partly driven by migration, is a key source of housing demand. Existing research and CMHC models suggest it has a significant effect on house price growth.

Over the past 20 years, countries with faster population growth generally saw stronger real house price growth (see Figure 2).

Canada and comparable, open economies such as Australia, New Zealand, Norway and Sweden share similar macroeconomic policy frameworks. They also had broadly similar experiences during and after the global financial crisis. None experienced a major housing correction after 2008, and all saw strong population growth alongside rising house prices.

Within this group, Canada recorded the steepest increase in home prices over the past 2 decades after adjusting for population growth (see Figure 2).

Why urbanization alone doesn’t explain Canada’s stronger home price growth

Where population growth happens also matters for local housing demand. Australia, Norway and Sweden saw notable shifts toward urbanization. This likely reflects the continued benefits of cities being closer together and the location preferences of homeowners, especially younger households and recent immigrants.⁴

Combined with rapid population growth, this shift toward urban areas appears to have added upward pressure on house prices.

Yet Canada, despite being slightly less urbanized than these peers, has seen stronger home price growth. This suggests that other factors are also contributing (see Figure 3).

Why housing demand has grown faster than supply in Canada

Since the second half of the 2010s, housing demand in Canada has generally outpaced supply, driven by population growth, rising incomes and low borrowing costs.⁵ Rapid population growth is only part of the story: demand was also supported by higher incomes and lower interest rates.

On the supply side, Canada’s annual housing construction remained relatively stable as a share of the housing stock. The housing supply growth rate was 1.2% in 2011 and 1.3% in 2022, remaining above the Organisation for Economic Co-operation and Development (OECD) average in both years. However, Ireland and New Zealand saw larger increases during the period, while Australia consistently maintained stronger growth of about 1.7% (see Figure 4).

Around 2022, new housing completions represented 1.4% of the existing housing stock in Austria and 1.5% in Japan. Both countries had higher construction flow rates than Canada despite slower population growth (Figures 2 and 4). This suggests that housing supply doesn’t always move in step with population growth.

Overall, housing supply growth increased in most countries between 2011 and 2022. In 11 of the 17 comparator countries, newly completed dwellings grew as a share of the existing housing stock by a larger margin than in Canada. Since 2017, Canada’s housing demand growth has increasingly outpaced supply growth, more so than in Australia and Sweden. The gap widened sharply after 2021, reaching nearly 5 new residents per housing completion in 2023–2024, compared with a lower peak in Australia and a decline below 1 in Sweden.

The ratio then fell sharply to about 1.53, which likely reflects later changes in immigration levels (see Figure 5). This suggests that recent house price growth in Canada may have been driven more by population growth outpacing new construction, even as supply expanded. ⁶

Canada has fewer homes per person than most peers

Canada has fewer dwellings per thousand inhabitants than most international peers and the OECD average.

Countries such as Sweden and Norway also experienced strong population growth, but their larger existing housing stock relative to population could have helped moderate house price increases (see Figures 2 and 6).

What Canada might learn from countries that build at scale

Canada’s house prices have risen faster and more persistently than in most comparable countries. This appears to be largely because housing supply hasn’t kept pace with the sharp increase in demand, especially since the second half of the 2010s.

Canada has introduced a wide range of policy measures to increase housing supply. Several peer countries have also achieved sustained success in scaling housing construction, creating an opportunity to learn from their experience.

Some countries have built housing at greater scale

A forthcoming global review of 10 peer countries will examine the strategies behind these outcomes. It will identify common themes such as:

• financial incentives
• planning reform
• construction innovation
• use of public land, and
• country-specific approaches and results

These lessons can help inform Canada’s ongoing efforts, while recognizing that international practices need to be adapted to the Canadian context.

A note on international comparisons

This article uses international comparisons to place Canada’s housing affordability challenges in context, but these comparisons should be read with caution.

Countries differ in how they:

• define housing data
• measure housing data, and
• collect housing data

These differences can affect direct comparisons across indicators.

We used harmonized datasets to support broad comparisons and identify high-level trends. These datasets are not meant for precise country-by-country conclusions. Sources included:

• the Federal Reserve Bank of Dallas
• the Bank for International Settlements
• the Organisation for Economic Co-operation and Development

Institutional, demographic, financial and policy differences should also be considered when interpreting the results.