2025 Housing Market Outlook

Economy

Uncertain economic outlook amid geopolitical and immigration shifts

Canada’s economic future faces significant uncertainty due to potential changes in U.S. trade policies and lower immigration levels. Given this uncertainty, we do not identify a base case. Instead, we project three plausible scenarios and will monitor how things unfold against these scenarios over the year.

Significant uncertainty surrounds the future of U.S. trade tariffs on Canadian exports to the U.S., potentially reaching up to 25% on all goods, with the likelihood of Canadian retaliation. This could have a major impact on Canada's economy as early as 2025, including:

• investment uncertainty
• a weaker Canadian dollar
• lower export revenues
• job losses
• higher inflation
• a greater risk of recession

Our medium scenario assumes that the U.S. will impose a 25% tariff on 10% of Canadian goods, with Canada retaliating in return. In this scenario, the negative economic impacts may be softened by stronger U.S. government spending and higher U.S. demand for imports as a result.

Reduced immigration targets for 2025 – 2027 will also affect the economy. Slower population growth could lead to lower economic activity. We assume these targets to be met gradually, over several years.

Considering these factors, we expect modest economic growth in 2025 improving in 2026 and 2027. After declining in 2023 and 2024, GDP per capita should grow over the forecast period.

Figure 1: Canadian Economy Faces Significant Uncertainty
Canada Real GDP Forecast (Trillion $CAD)

Source: CMHC
The forecasts included in this document are based on information available as of January 14, 2025.

Similarly, we expect consumer spending per capita to increase over the forecast period, supported by lower borrowing costs. However, several factors will slow growth, notably:

• loss of purchasing power from past inflation, with incomes catching up gradually
• increasing unemployment rates in 2025
• higher interest rates on mortgage renewals in 2025 – 2026

Overall consumer spending will grow at a slower pace due to reduced population growth, leading to weaker overall economic demand. This limits the need for workers and slows job growth especially in 2025. As a result, we expect unemployment to rise until mid-2025. An improving economy and lower population growth will contribute to lower unemployment rates in 2026 and 2027. Government spending will also likely slow down with lower population growth.

We expect Canadian business investment to rebound over the forecast period after two years of weak activity. Lower interest rates will support this recovery. However, trade tariffs, rising wage pressures from limited population growth and tighter lending conditions from cautious lenders will limit the rebound.

To control inflation and support the economy amid new tariffs, the central bank is expected to further cut rates in 2025. Fixed-rate mortgages, linked to bond yields, already reflect many of these changes and will see small improvements. Variable-rate mortgages, tied to the policy rate, are expected to see bigger reductions, making them attractive to homebuyers.

The overall impact of this economic outlook on the housing market is mixed. Slower population growth and economic challenges will limit housing activity. On the other hand, some households will see improved buying power, boosting housing activity in the short term.

Housing markets

Affordability improvements release pent-up housing demand, supported by economic recovery later in the forecast

Despite the economic headwinds described above, we expect housing market activity in Canada to improve. The combination of lower mortgage rates and changes to mortgage rules introduced in 2024 should unlock pent-up demand from homebuyers previously priced out of the market. However, some of these homebuyers may face longer loan terms, higher interest costs over the duration of the loan and larger down payments as prices continue to rise.

Compared to new homes, we expect resale homes to attract a larger share of renewed demand as they offer more options for financially constrained homebuyers. In addition, the length of new construction projects may limit developers' ability to meet demand quickly.

Millennials, many of whom are first-time buyers, are currently driving housing demand. As remote work declines, we assume this group will prioritize being closer to jobs, boosting sales recovery in larger urban markets.

We also expect some repeat homebuyers to return to the market. This will include those looking to upgrade, taking advantage of lower mortgage rates. It also includes homeowners who purchased during the pandemic, facing mortgage renewals between 2025 and 2027. These factors may lead them to rethink their housing needs, driving sales activity.

The housing market recovery will be uneven with the condominium apartment market lagging especially in regions that depend on investor activity. Investors who bought pre-construction units to rent out are increasingly selling as costs rise faster than rental incomes. We expect listings to continue to increase, driven by record new condominium apartment completions in 2025 and softening rental markets.

Prices will grow faster in 2025, reflecting a recovery and renewed demand for ground-oriented homes, before slowing down in 2026 – 2027.

By 2027, we expect much of the pent-up demand to be met. Although mortgage payments and prices will rise, improved job markets and income growth will make housing more attainable than during the 2022 – 2024 period. This will support further recovery in sales.

More affordable regions will lead price and sales recovery

The housing markets in Ontario and British Columbia are particularly unaffordable. We expect sales in these markets to remain below their 10-year averages. This is due to ongoing affordability challenges and the more notable impact of new immigration targets. We expect prices to grow more slowly in these provinces, especially in the first half of the forecast period.

The more affordable Alberta and Quebec markets began recovering in early 2024. Sales in these provinces are expected to reach historically high levels, with prices growing faster than national averages during the first half of the forecast period.

Housing starts set to slow down

We expect housing starts to slow down over the forecast period, remaining above their 10-year average. The slowdown is primarily due to fewer condominium apartments being built. With low investor interest and more young families looking for family-friendly homes, developers will find it harder to sell enough units to fund new projects. The increase in unsold units will likely reduce new project launches, leading to a decline in new condominium apartment construction.  

Regional activity will vary:

• Ontario: Pre-construction condominium apartments, often bought by investors, will see lower demand due to weaker resale and rental markets. This will lead to new construction slowing down as of 2025.
• British Columbia: With fewer investors and stronger resale markets, the slowdown in condominium apartment construction will be milder and delayed.
• Alberta: Because more buyers are actual residents as opposed to investors, the impact on new construction will be minimal.

Rental apartment construction reached record levels in 2024 due to government support, a rapidly growing renter population and strong rent growth at the time of planning. We expect this momentum to continue through 2025 – 2026, supported by numerous projects set to start. However, softening rental market conditions may lead to fewer rental projects starting in 2027.

We expect a small recovery in ground-oriented home construction, led by lower-priced options. First-time buyers may prefer resale homes that offer better supply. Developers will be limited in their ability to compete with these resale markets due to high costs and lower profits. Regionally, new construction in Quebec will recover from recent lows. In Alberta, new construction will slow down from high levels.

Figure 2: Canada’s New Construction Slows but Maintains Historic Strength
Housing Starts by Dwelling Type

Source: CMHC
The forecasts included in this document are based on information available as of January 14, 2025.

Rental markets continue to rebalance

Since 2024, rental supply has grown faster than new demand but affordability remains a challenge. We expect lower immigration and an increase in first-time homebuyers to continue to reduce rental demand throughout 2025 – 2027. Supply will continue to expand as new rental units are completed, leading to higher vacancies and slower rent increases.

However, rental affordability will take more time to improve. Some vacated units will adjust to market rents and renters' incomes will catch up to previous market rent increases. Additionally, as financially able tenants move to higher-priced new units, more affordable options will gradually open up for other tenants (PDF).

Alternative scenarios

To address significant economic uncertainty, we present two alternative scenarios below in addition to the medium scenario presented above.

1. Low-growth Scenario

• The U.S. puts higher tariffs on Canadian exports, causing job losses and a recession in 2025.
• U.S. immigration policies become stricter, making Canada more attractive to immigrants, leading to higher immigration than expected.
• Higher tariffs temporarily raise inflation but the central bank lowers the policy rate to support the economy. Financial uncertainty increases mortgage borrowing costs slightly relative to the medium scenario.

Impact on housing:

• The recession delays housing recovery, increasing pent-up demand.
• Fewer homes are built due to weaker demand and supply challenges.
• By late 2026, the economy rebounds and a growing population boosts home sales.
• Rental markets stay tight, limiting improvements in rental affordability.

2. High-growth Scenario

• The U.S. introduces fewer and shorter-lasting tariffs, while U.S. government spending boosts Canadian exports.
• Canadian immigration meets recent targets.
• Higher incomes and stronger consumer confidence encourage more spending. Stronger declines in borrowing costs make homeownership more attainable.

Impact on housing:

• More homes are built thanks to better financing and business conditions.
• Stronger job and income growth combined with lower mortgage rates make homeownership more accessible.
• Higher demand pushes home prices up more quickly.

*Conventional 5-year fixed mortgage rate (average of rates posted by Canadian lending institutions).
The forecasts included in this document are based on information available as of January 14, 2025.
(F): Forecast scenarios for low, medium and high growth
Source: CMHC, CREA, Statistics Canada, Haver Analytics

British Columbia's (B.C.) housing markets will face mixed results in 2025. Resale markets are likely to recover after slowing down over several years. Meanwhile, we expect rental markets to continue softening with higher vacancy rates. New home construction will be marginally higher as some demand returns to the presale market.

Slower population growth will impact housing demand

We expect economic growth to be slower in B.C. in 2025 before rebounding in 2026 and 2027. Employment is expected to continue weakening with slower job creation until mid-2025 but will improve throughout the remaining forecast horizon. Wage and disposable income growth was relatively significant in recent years but will be flat in 2025. These factors affect a household's capacity to pay for housing.

Changes to immigration policy will also have a significant effect on housing demand in B.C. International migrants to Canada are likely to settle in the province, especially in major regions like Metro Vancouver. Recent years have seen large inflows of non-permanent residents. Net inflows are expected to slow over the forecast horizon. At the same time, residents in B.C.'s pricier regions will continue to seek more affordable housing in markets like the Prairies, resulting in net interprovincial outflows.

Within B.C., some residents of Vancouver will continue to seek more affordable markets like Chilliwack, Victoria and Kelowna.

Resale activity on the rise in 2025 supported by low mortgage rates

We expect the resale markets in both Vancouver and Victoria to rebound in 2025 after 2 years of declining sales activity. This shift will be most prominent in 2025 with marginal growth in sales and prices in 2026 and 2027. The main driver will be continued low mortgage rates that will expand borrowing capacity. Higher interest rates in the past 2 years slowed down resale activity while average prices remained below 2022 peaks.

The impact of recent rate cuts began to appear in the resale market in late 2024 with elevated sales activity compared to the same time in 2023. We expect this to continue. However, total sales in 2025 will only approach long-term averages. They will remain well below highs seen in 2021.

Changes to international migration patterns will have an impact on resale markets. However, these won't be as significant as in the rental market. Any impact is likely to be concentrated in Vancouver, as recent immigrants are less likely to buy homes in other urban centres in B.C., like Victoria.

Figure 1: Increased Demand in Metro Vancouver Will Support Sales After Several Years of Below Average Activity
Sales by Type of Dwelling and Median Forecasts, Vancouver CMA

Source: Greater Vancouver REALTORS®, Fraser Valley Real Estate Board, CMHC

Prices to climb mostly in 2025 and stabilize with marginal growth beyond

Increased sales activity will help absorb some inventory on the market right now in the form of unsold new inventory and active listings. We expect average days on market to also fall slightly after climbing for 2 years. This will result in a hotter market with more upward price pressure. Most of this will be concentrated in 2025 when the effects of lower mortgage rates are likely to manifest.

High wage growth in recent years along with continued low rates will expand borrowing capacity to levels similar to mid-2020. With price growth slowing down recently, higher borrowing capacity will be more effective in driving demand.

The return of price growth in 2025 will also help spur expectations for investors, especially those looking at presales.

Housing starts to grow, supported by favourable financing policies and more demand for new homes

We expect housing starts to rebound marginally in both Vancouver and Victoria in 2025 after a weaker 2024. This will mainly be driven by multi-unit starts, especially in the rental market. A historically tight rental market and government support will continue to encourage new rental developments. However, as more supply comes online and rent growth slows, developers may become more cautious. This may limit rental development later in the forecast horizon.

While difficulties in new condominium construction will continue due to pricing and a lack of presales, a stronger resale market will support planned projects. Rising unabsorbed inventory of this type has signalled a lack of demand, putting some projects on hold. Consumer expectations for future pricing have also lowered as price growth was muted for the past 2 years. As mortgage rates stay lower, potential homebuyers may borrow more to support new construction. However, a lack of land transactions in recent quarters may dampen multi-unit construction further into the forecast horizon.

Low mortgage rates will also support a turnaround in single-detached construction in both Vancouver and Victoria as demand returns for this segment. In the longer term, this type of housing will continue to be scarcer as a lack of new land and the pricing of existing land discourage new supply.

Rental vacancies will increase as new supply comes online and migration changes reduce demand

Vacancy rates in major centres across B.C. rose in 2024 after remaining relatively low over multiple years. We expect vacancy rates to stay historically high in the next few years. A record number of units are under construction as part of efforts to increase rental supply. Most of these units will likely enter the rental market in the next few years. These units are likely to come onto market at high rents, potentially impacting their absorption rates.

Lower growth in the renter population will be the main driver in rental markets in B.C., especially in urban centres. New international migrants are likely to settle in these regions and occupy rental units. As we expect lower population growth from these sources in the next few years, rental demand will be impacted. Recent immigrants are much more likely to choose rental housing than homeownership.

As more new, higher-priced units come onto market, average rents will continue rising. However, we expect asking rents to be negatively pressured as rental demand declines. This will help affordability and lead to higher turnover as the gap between rents of occupied units and vacant units decreases.

Figure 2: Influx of Rental Supply Will Impact the Market in the Near Future
Purpose Built Rental Universe Supply and Under Construction

Source: CMHC

This forecast is subject to risks

The forecast for B.C. is subject to macroeconomic forces similar to those that affect other regions in Canada, like interest rates, inflation and migration. If these forces diverge from expected paths, the forecast will be impacted.

Potential trade tariffs from the new U.S. administration may impact the provincial economy, especially on major items like softwood lumber, agriculture and natural gas. Stronger tariffs will negatively affect rural communities at first and urban areas afterwards.

Rental construction has benefitted from federal financing incentives and municipal waivers. If programs like these change, new construction may be negatively impacted.

Market insights

Metro Vancouver will continue to be the centre of focus for housing activity and demand as resale markets rebound in 2025.

Sales and prices of condominium units further away from the city centre will increase marginally after weak activity in the past 2 years. Specifically, new condominium pricing in Surrey and Burnaby will see some support after quarters of climbing unsold inventory.

Sales and development of ground-oriented homes like single-detached and semi-detached homes will also see support as consumer budgets increase. While single-detached prices will continue to rise, sales and development will continue to shift toward semi-detached homes due to affordability constraints especially in the City of Vancouver.

Construction and sales of townhomes will rebound as well, with a focus on areas further out in the suburbs north of the Fraser River. Land is relatively cheaper in these areas and commutes aren't as congested by bridges compared to the south. Cheaper land allows developers to continue building and selling at more affordable prices.

The recent increase in the insured mortgage price limit from $1 million to $1.5 million will support sales and prices of homes in Vancouver. This is likely to affect townhome sales the most, as these are the most common type of home sold near the $1-million mark. This will benefit dual-income households and those seeking to acquire more space. Dual-income buyers account for more than half of transactions in Metro Vancouver.

Starts are expected to rebound in Metro Vancouver in 2025 after declining significantly in 2024. However, a lack of land transactions will limit further growth in 2026 and beyond. Developers have been extending land loans from 3 years to 5 years. This indicates that they are preparing for continued weakness in demand.

New multi-unit construction will continue to focus on rental units. This is mainly because of supportive policies and continued developer interest. However, market intelligence suggests that it is a challenge to lease units at higher rent levels while facing rising land prices. This will likely reduce feasibility even in the City of Vancouver.

Rising inventory and limited presales have stalled condominium projects in recent months with developers taking out more inventory loans for existing developments. While more resales and lower mortgage rates will help with some of these concerns, developers will continue to find it difficult to build new condominium projects closer to the city centre. This is due to lower demand for presales at higher prices needed for project feasibility.

The rental market will continue to ease as changes to immigration policy are expected to reduce demand. We expect asking rents and rents of new units to have limited growth. They will likely remain stagnant as vacancies stay higher.

Source: Greater Vancouver REALTORS, Fraser Valley Real Estate Board, CMHC
The forecasts included in this document are based on information available as of January 14, 2025.

Victoria will see higher demand in the resale market in 2025, building on signs of stronger activity materializing in 2024. Victoria's economy is supported by a large public sector, resulting in a more stable economy and consistently low unemployment.

Like in Vancouver, lower mortgage rates will be a key driver in supporting resale activity in Victoria. We expect resales to rise mostly in 2025 with slower sales growth in 2026 and 2027. At the same time, price growth will return to the market, slightly lagging behind Vancouver.

Single-detached home sales will benefit from expanded purchasing power and changes to the mortgage insurance price limit from $1 million to $1.5 million. Many recently sold single-detached homes fall within that range.

Rebounding single-detached sales will lead to higher starts of that type, which will temporarily reverse the downward trend. However, we expect single-detached construction to remain historically low. On the other hand, multi-unit construction will remain prominent and continue to grow, supported by an increasing shift toward rental units. We expect a continued concentration of both rental and condominium apartment development in Langford, where land is relatively more available.

The rental market will continue to see higher vacancies in 2025 and further into the forecast horizon. Expanding rental supply from record-high construction will drive this increase in vacancy rates. However, high rents in new projects may contribute to difficulties in leasing. Some future projects closer to the downtown core have planned rents comparable to those of similar units in Vancouver.

Source: CREA, CMHC
The forecasts included in this document are based on information available as of January 14, 2025.

Population growth in the Prairie markets will diminish, slowing growth in demand for housing

Population growth has been rapid in the Prairie markets in recent years, especially in Alberta. Domestic and international in-migration has been driven in part by the attractiveness of the more affordable housing in the Prairie markets.

Recent changes in immigration policy will slow growth across the Prairie markets. Non-permanent-resident (NPR) admissions and immigration are expected to decline across the Prairies but are unlikely to be as negatively impacted as in British Columbia (B.C.) or Ontario. NPRs in Prairie markets currently make up near or less than 5% of the population, the national threshold set out in Immigration, Refugees and Citizenship Canada's Immigration Levels Plan.

Figure 1: Prairie Population Growth Has Been Less Dependent on NPRs and Should Be Less Impacted by Policy Changes
NPRs as a Percent of Total Population, July 1^st 2024

Source: Statistics Canada Tables 17-10-0005 and 17-10-0158, CMHC calculations

We expect Alberta to continue to see growth from interprovincial migration, which has been strong recently — especially from more expensive centers in B.C. and Ontario.

Figure 2: Relative Affordability in the Prairie Markets Will Support Continued Migration
MLS® Average Sale Prices Relative to Those of Toronto CMA

Source: Canadian Real Estate Association, MLS®

Employment hasn't kept up with labour force growth

Labour markets have been mixed across the Prairie markets in the second half of 2024. Population growth has led to rapid expansion of the labour force but employment hasn't matched the pace. Unemployment remains high compared to last year.

Saskatoon is the exception, where full-time employment has remained remarkably strong and unemployment low. Job growth has accelerated in recent months in Calgary and Edmonton, which will typically contribute to demand for housing (either ownership or rental).

Figure 3: Labour Force Growth Has Driven Strong Growth in Both Employment and Unemployment in Most Prairie Markets but Saskatoon Has Been a Notable Outperformer
Year-To-Year Percent Change by Labour Force Component, 2023 to 2024

Source: Statistics Canada, Tables 14-10-0385 and 14-10-0393

Resale markets to remain active, with competition among buyers putting upward pressure on prices

While sales have declined from pandemic highs in 2021 across the Prairie markets, they remain quite elevated on a historical basis (except in Winnipeg). Declining mortgage interest rates raised borrowing capacity for potential buyers in 2024, encouraging some to return to the market. Between buyers returning to the market and strong population and household growth, activity was strong in 2024 after a weaker 2023.

Despite slowing population growth in 2025 and 2026, we expect demand to remain strong overall and sales to remain elevated or to increase slightly. Tight markets will put upward pressure on prices early in the forecast. We expect the market to move toward greater balance and more modest price appreciation close to the end of the forecast period.

Activity in the more expensive single-detached segment had lessened as borrowing capacity declined. With some reversal of this decline, we expect greater activity in this segment.

Price and rent growth, along with policies and programs, will support new construction but uncertainty may make developers more cautious

In Calgary and Edmonton, where starts are quite high, we expect starts to decline modestly over the forecast horizon. In Regina, Saskatoon and Winnipeg, however, we expect growth.

Recent growth in both prices and rents provide support to new housing development across the Prairie markets, especially in Calgary and Edmonton. Regulatory and policy changes are aligned to support this increase.

We expect single-detached homes to remain a smaller part of new home construction over the long term. However, in the short term, some recovery in demand for this housing type may support construction.

Rental housing has driven most of the recent growth in starts across the Prairie markets, supported by federal programs. The 2024 Rental Market Survey showed a surge in new rental stock and vacancy rates in markets across the country, most significantly so in Calgary. While the overall outlook for rental housing development remains positive, between higher vacancies and uncertainty regarding demand, we expect developers to show some caution.

A continued influx of new rental supply will reduce pressure on rents

With a large stock of rental housing under construction, we expect a great deal of it to come into the market over the forecast horizon, especially in 2025 and 2026.

With increasing supply and slowing demand growth, we expect vacancy rates to increase in 2025 and 2026, following jumps in 2024, as landlords work to lease-up new buildings.

Figure 4: Rent Growth Will Slow to Rates More Typical of the Expected Rise in Vacancy Rates
Vacancy Rate and % Change in Average Rents, 2-Bedroom Purpose-Built Rental Units, 1990 – 2024

Source: CMHC Rental Market Survey

The pressure that has led to strong rent growth across the Prairie markets in recent years will lessen but new rental units will continue to command higher rents and contribute to modest rent growth.

Uncertainty will be greater than usual

Tariffs pose a risk to the economy, perhaps more strongly so in Alberta and Saskatchewan among Prairie markets. If the suggested 25% tariffs were to be applied, they could have huge implications for Prairie economies and housing markets.

If population growth were to be sustained in the Prairie markets due to relative affordability and lower shares of NPRs, particularly in Calgary and Edmonton, demand growth could remain high. Conversely, if the "push" factors in markets like Vancouver and Toronto were to diminish and interprovincial flows were to shift and further reduce population growth in the Prairies, we could see weaker demand growth. These factors will likely impact vacancy rates and rents most strongly in the short term.

The oil and gas sector is a significant driver of Prairie economies. Oil prices are expected to fall slightly owing to weaker global demand and reversals in supply cuts. Weaker performance in the oil and gas sector (possibly due to tariffs) is a significant downside risk to the outlook for Prairie markets, especially in Calgary and Edmonton.

Market insights

Despite recent rent and price growth in Edmonton, this city remains one of the most affordable of Canada's largest urban centres. Edmonton will remain an attractive option for international and internal migrants, even as international in-migration slows nationally.

We expect the resale market in Edmonton to remain quite active in 2025, following a very busy 2024. A tight resale market will contribute to price growth over the forecast horizon, tapering towards 2027 as the market returns to more balanced conditions.

New construction increased strongly in Edmonton in 2024, surpassing the previous record from 2015. We expect some hesitancy from developers in the face of slowing demand and high vacancy rates. A high (though declining) level of construction will be supported by sustained price and rent growth, as well as by local policies and programs:

• The City of Edmonton approved shovel-ready development sites for affordable housing and introduced an automated development permit review process to expedite housing approvals.
• The Infill Infrastructure Fund covers up to $4 million of shared public infrastructure costs for multi-housing developments in existing neighbourhoods. It supports both market and non-market projects.

Single-detached housing remains a major source of starts in Edmonton. High levels of completed and unabsorbed inventories may weigh on single-detached starts but builders in Edmonton haven't been especially sensitive to growing inventory in the past, particularly in the face of sustained demand.

We expect strong growth in the rental stock, a gradual increase in the vacancy rate and slowing growth in rents.

Source: CREA, CMHC
The forecasts included in this document are based on information available as of January 14, 2025.

Calgary's strong population growth in recent years is expected to slow as federal policies impact international migration. However, Calgary's recent growth has been supported also by strong interprovincial migration led by migrants from Toronto and Vancouver. Even with the higher price growth forecasted, Calgary will remain an attractive option for prospective internal (and international) migrants who are looking for a cosmopolitan urban centre with more affordable housing.

We expect Calgary's resale market to see a slight increase in activity in 2025 after remaining flat between 2023 and 2024. We anticipate sustained demand supported by increases in borrowing capacity and continued (though diminished) demographic and economic growth. Sales will be restrained by limited listings, though this is expected to ease and lead to more balanced market conditions over the forecast horizon.

Calgary hit a record-high level of new construction in 2024 for the third year in a row. Recent and expected price growth and reduced financing costs will support elevated construction levels, as will supportive policy. Among supportive policy changes is the approval in November 2024 of adjustments to Calgary's service plan and budget to support investments in housing, land use and local planning. This funding will support the development of new communities to increase the housing supply and help with redevelopment in older neighbourhoods.

We expect slowing growth in demand and recent effects of large increases in supply (including elevated vacancy rates) to lead to some caution from developers and a slowdown in new construction.

Calgary saw an unprecedented increase of roughly 10% in the purpose-built rental stock in 2024, according to CMHC's Rental Market Survey. Along with this increase came a notable uptick in the vacancy rate, which jumped from 1.4% in 2023 to 4.8% in 2024. We expect growth in the stock to continue along with increases to the vacancy rate and slowing growth in rents.

Elevated vacancy rates and slower rent growth may lead to fewer condominiums being used as rentals, especially with demand in the resale market.

Source: CREA, CMHC
The forecasts included in this document are based on information available as of January 14, 2025.

Labour force growth in Regina has come from part-time employment and unemployment, while full-time employment has declined.

Activity in the resale market was strong in Regina in 2024, with sales near pandemic highs. Tightening in the resale market led to significant price growth after modest declines in 2023. We expect stable or slightly increasing buyer activity to support further price growth, generally in line with recent trends. Limited listings will keep sales from increasing more rapidly.

Starts are expected to increase in Regina over the forecast horizon. Single-detached starts are expected to be a source of growth in new construction, as demand in this segment returns with increased borrowing capacity. With a growing emphasis on multi-family construction in Regina, the supply of new single-detached homes hasn't kept pace with demand.

A low inventory of completed and unabsorbed units will support increasing new construction in Regina.

We expect increases in the rental stock and vacancy rate. The forecasted vacancy rates remain below the elevated levels of 2015 to 2021 and the rental market remains tight. We expect reasonably strong rent growth in 2025, slowing in 2026 and 2027.

Source: CREA, CMHC
The forecasts included in this document are based on information available as of January 14, 2025.

Saskatoon's labour market has done extremely well in incorporating new labour force participants. It has seen high growth in the labour force being matched by high growth in full-time employment. Saskatoon's unemployment rate has risen less than in other markets. Meanwhile, its youth unemployment rate has declined reasonably quickly after having increased at the start of the year.

Saskatoon's economy has been buoyed by large investments. Projects coming online over the forecast horizon (like the Jansen potash mine) are expected to keep the local economy strong.

Sales activity in Saskatoon reached an historical high in 2024, surpassed only by the pandemic peak in 2021. This elevated activity contributed to a tight resale market. We expect continued demand to contribute to elevated sales and tight resale market conditions, which will support price growth through the forecast horizon.

Rising prices and rents will encourage elevated levels of new construction in Saskatoon. The rental market remains tight and we expect rental housing to continue to lead new construction. Low and declining levels of unabsorbed inventories (in single- and multi-unit properties) will also support new construction.

Strong employment gains and international migration are expected to support rental demand in the near term. This is expected to keep vacancy rates low in Saskatoon in 2025. We expect gradual increases in the vacancy rate in 2026 and 2027 as more new rental stock comes online. With persistently low vacancy rates, we expect strong rent growth in 2025, with the pace of growth tapering over 2026 and 2027.

Source: CREA, CMHC
The forecasts included in this document are based on information available as of January 14, 2025.

Recent data for Manitoba shows non-permanent-resident (NPR) permits flattening or even declining slightly through the later part of 2024, with net outflows of study permit holders.

Winnipeg's labour market has performed reasonably well over 2024. Full-time and part-time employment have posted gains but the number of unemployed also increased over 2024.

In contrast to other Prairie markets, sales in Winnipeg fell to pre-pandemic levels in 2023. We expect sales in Winnipeg to return to a modest but steady growth trend over the forecast horizon. Price growth will continue to be slower in Winnipeg than in other Prairie markets.

Winnipeg has relatively little year-to-year volatility in new construction, with this type of construction generally following a consistent upward trend. Over the forecast horizon, we expect stable growth in starts to be led by purpose-built rental starts, as in recent years. This will be supported by growing rents, low vacancy rates and supportive policies and programs.

Continued government funding in 2025, as well as the 2024 removal of provincial sales taxes on new rental housing and the absence of rent controls on newly constructed units will be factors supporting new rental development.

In contrast, single-detached construction will continue the trend of a slow decline in favour of multi-family housing construction over the medium-to-long term.

While new purpose-built rental supply was added at a historically fast pace in 2024, vacancy rates remained stubbornly low in Winnipeg. We expect that the vacancy rate will increase gradually over the forecast horizon to 2027 but that it will remain below historical averages. We expect reasonably strong rent growth in 2025, which will diminish through the later part of the forecast.

Source: CREA, CMHC
The forecasts included in this document are based on information available as of January 14, 2025.

Housing starts to decline for the fourth year in a row

Total housing starts in Ontario's central markets* are expected to decline in 2025. This is due to condominium apartment starts falling further because of the lagged impact of elevated financing rates. Weak past demand has reduced condominium apartment starts, with fewer land deals, project launches and pre-construction sales in the past 2 years. This trend is particularly evident in the regions of the Greater Toronto Area (GTA), Hamilton and Kitchener – Cambridge – Waterloo.

According to our estimates, Ontario's central markets are short of housing, providing some tailwind to new construction. Despite the inherent demand for new housing, financing new housing remains a key obstacle. We see conditions for new home building becoming more favourable for developers. That said, apartment starts are unlikely to rise immediately, considering their long development timelines. We see the number of apartment starts stabilizing in 2026 and then increasing in 2027.

Offsetting this year's decline in condominium apartment starts will be robust purpose-built rental apartment starts. Government initiatives to address housing shortages will kick-start thousands of new market and affordable rental homes in the next year. Meanwhile, recent provincial legislation aims to streamline building processes.

As we move further into 2026, our outlook for rental apartment starts will be checked by the following:

• Developers appear cautious, evidenced by the fact that there aren't many high-rise land deals happening.
• Increasing vacancies and stagnant rent growth will discourage new supply.
• Market intelligence indicates fewer rental projects in the ideation stage, which will slow rental starts in the later part of our forecast period.

We expect more buyers to look for new single-detached and row homes because of long-standing shortages in the resale market. These types of homes will more quickly respond to the recent fall in mortgage rates, as well as further household formation and income growth. However, we don't expect a significant increase over previous years, owing to their high price tag and limited serviced land. Regional variations influence our outlook, with the London and Windsor census metropolitan areas (CMAs) expected to outperform thanks to better affordability and land availability.

Economic challenges seen over the past year will diminish, benefiting resale markets

Ontario's economic and labour market conditions softened in the past 2 years. In 2025, we expect a rebound in Ontario's economic growth and more supportive mortgage rates to breathe some life into local resale markets.

The number of existing home sales in 2024 was well below its 10-year average (Figure 1). Elevated mortgage rates have been particularly challenging for Ontario's central markets, which are more sensitive to interest rate changes. Transactions ramped up in the fall as a result of a steady drop in mortgage rates and slightly lower home prices that enticed buyers.

As we move into 2025, MLS® sales are expected to increase. The previous strength in income and population growth, and less burdensome mortgage rates, will help offset poor affordability conditions. Employment growth will provide additional support for housing demand.

Figure 1: There Is Plenty of Upside Potential for Existing Home Sales
Ratio of MLS® Sales-to-Population, Annual Periods, Ontario

Source: CREA, Statistics Canada Table 17-10-0005, CMHC calculations.

Sales growth in the GTA is expected to be stronger compared to nearby CMAs. Market intelligence indicates fewer buyers from the GTA are looking to move out. This is mainly due to return-to-office mandates. This, in addition to fewer employment opportunities in cities outside the GTA, suggests these regions are likely to experience comparatively smaller increases in sales activity.

More first-time homebuyers to enter the market in 2025

First-time homebuyers in Ontario's central markets will be encouraged by changes to insured mortgage rules. Because homes in these markets are generally expensive, it's more likely that buyers in these markets will benefit more from increased access to lower down payments and longer amortizations, especially in the GTA.

However, sales numbers are likely to be tempered by several factors:

• The absolute level of mortgage rates is still quite high and would likely discourage many prospective buyers.
• Many existing homeowners are likely to focus on saving to improve their finances, leading to a slower recovery in transactions. This is because many will renew their mortgages this year and anticipate higher payments.
• Investors will be dissuaded by low expected returns, especially in the rented condominium market.
• Weak consumer confidence readings indicate home purchases could remain lower than historical averages.

With an economy still operating below potential, persistently poor affordability and fewer investors, it will be harder for sales to return to the stronger levels implied by demographics. Despite these issues, we expect the market to be stable in 2026 and 2027.

Improved market conditions will boost prices, led by ground-oriented homes

This year, there will be renewed upward pressure on the MLS® average price. The improvement in market conditions seen at the end of 2024 supports this view.

Moving into 2025, demand fundamentals such as income and household formation will help to ensure prices grow. However, the pressure on prices will be mild. This is because demand will be driven more by first-time homebuyers and elevated mortgage rates will squeeze affordability.

We expect price growth to be greater for family-sized homes. This will be driven by a strong demand from young families and a limited supply of larger homes from new construction. This will result in tighter market conditions in this segment.

Overall, market conditions will remain balanced, but are anticipated to be softer for condominium apartments due to high inventories in the largest urban centres (Figure 2). The number of active listings continued to be high compared to previous years.

Figure 2: Prospective GTA Buyers Have a Well-Stocked Market with Plenty of Options
Active Listings, December Periods, Greater Toronto Area

Source: TRREB, CMHC calculations.

We expect new listings to grow enough to counteract growing demand because of the following:

• Investors facing challenges with cash-flow-negative rental properties due to higher mortgage rates will list more properties.
• More homeowners will consider moving as their low mortgage rates expire, reducing their disincentive to move, thus bringing more listings.
• A high level of condominium apartments under construction will add to supply.

Greater supply and declines in the temporary resident population to rebalance the rental market

After 2 years of acceleration, primary-market rent growth slowed in 2024, owing to increased vacancy rates. This year, we expect strong growth in rental supply and weaker renter household formation to further slow down rent growth.

Rental demand in Ontario's central markets is vulnerable to recent changes to immigration targets (Figure 3). The planned reduction in the non-permanent resident population is resulting in far fewer international student arrivals. Our regional market intelligence suggests that landlords in areas near post-secondary institutions found it harder to fill vacant units this past fall.

The rental market's performance will vary by market. Select metropolitan areas in Southwestern Ontario and the Greater Golden Horseshoe could see greater downward pressure on rental demand. This is because they relied more heavily on non-permanent residents for population growth.

Figure 3: Ontario Faces the Prospect of Strong Outflows of Non-permanent Residents
Non-permanent Resident Outflows, Third Quarter Periods, Select Provinces

Source: Statistics Canada. Table 17-10-0040-01. Estimates of the components of international migration, quarterly.

Risks to the outlook

Known upside risks to the forecast include:

• Higher than expected pent-up homeownership demand and a more acute shortage of housing. This may be driven by past episodes of high population and income growth, prompting more first-time homebuyers to enter the market.
• Lower than expected mortgage rates due to the central bank signaling more policy rate cuts, driven by soft employment and inflation data.
• Further supply-side policy changes that lead to housing starts exceeding predictions.

Known downside risks to the forecast include:

• Lower than expected population growth. International migration is a major source of demand in Ontario's central markets. Further changes in immigration policy or delayed effects of existing policy could have greater negative impacts than forecasted.
• Persistently high mortgage rates coupled with households prioritizing saving.
• Mortgage arrears in the most expensive housing markets are expected to increase. This could result in greater-than-expected supply, as strained borrowers seek to repair their balance sheets by selling property.
• Greater trade protectionism threatening the outlook for Ontario's export activity, which could result in less economic growth.

* References to Ontario's central housing markets mean the Toronto, Oshawa, Hamilton, Kitchener – Cambridge – Waterloo, London, St. Catharines – Niagara and Windsor census metropolitan areas (CMAs).

Market insights

Housing starts in the Greater Toronto Area (GTA) will be driven lower by declines in the condominium apartment segment this year. High development costs and weak demand point to fewer apartment starts. Detached home starts are expected to decline slightly in 2025, with a modest uptick anticipated in 2026 and 2027 due to lower mortgage rates and more accommodative mortgage rules.

The overall decline in starts masks our expectation for higher purpose-built rental apartment starts this year. Yet, even in this segment, sentiment among developers remains weak. Local market intelligence suggests many rental projects in the GTA aren't viable at current rents and would require property taxes and development charges to be waived, along with the current HST waiver.

The share of apartment starts in the GTA made up by the 905 (the area code denoting the region's suburbs) is likely to continue at higher levels than history due to that area's cost advantage over the 416 (the urban core). Ground-oriented starts (detached, semi-detached and row homes) will continue to feature more prominently in the 905 due to the 416 having limited and costly land, greater population density, as well as land-use planning measures favouring denser housing types.

Following 3 years of very low sales volumes, pent-up demand is expected to increase MLS® sales in 2025, aided by ample choice, lower prices and new insured mortgage rules. However, investors are unlikely to return to the market as they won't see rates low enough to make up for significant negative cash flow positions. Fewer investors and persistent affordability challenges will hold MLS® sales below their 10-year average.

The MLS® average price is projected to rise slightly in 2025 due to increased borrowing capacity but high supply and cautious buyers will keep growth contained. Ground-oriented homes are expected to see higher prices due to greater pent-up demand while condominium prices will likely face continued downward pressure. We expect price growth in the GTA to remain in the single-digit range through 2027, with potential escalation near the end of the forecast horizon due to limited new construction of all home types.

The purpose-built rental apartment vacancy rate is expected to rise in 2025 and 2026 due to higher levels of condominium and purpose-built rental completions, along with weaker demand and a higher unemployment rate. Following record-low rental turnover in 2024, some GTA renters should transition to homeownership, further increasing vacancy rates. We expect below-average growth in the average 2-bedroom rent, allowing incomes to catch up and more renters to enter the market by 2027.

Source: CREA, CMHC
The forecasts included in this document are based on information available as of January 14, 2025.

Source: CREA, CMHC
The forecasts included in this document are based on information available as of January 14, 2025.

Single-detached starts in 2025 will be higher and will remain flat over the rest of the forecast period. Housing starts have consisted mostly of multi-family units in recent years but single-detached starts should get a boost from recent mortgage rule changes.

Multi-unit starts will grow slightly in 2025 but housing supply shortages will encourage more multi-unit starts in the second half of 2026 and in 2027. Reduced migration, weak demand for condominiums and many rental completions will constrain apartment starts in 2025. Market intelligence suggests that developers believe this slowdown is only temporary. In the second half of 2026 and in 2027, declining completions and a rebound in population growth should encourage apartment starts again.

The forecast for the Hamilton CMA resale market in 2025 shows a positive trend in MLS® sales. This trend will continue into 2026 and 2027, although at a slower pace. Changes to insured mortgage rules will make the market more accessible, particularly to first-time homebuyers. These favourable conditions will persist and the current economic uncertainty that's been holding back some buyers should dissipate by 2026 and 2027.

The MLS® average price will rise due to higher demand but this growth will be tempered by high levels of inventory. The supply side of the market will constrain price growth, as for-sale inventory in Hamilton is above its 10-year average.

The purpose-built rental market vacancy rate will increase in 2026 before moderating in 2027. This is because of an expected record level of completions and weaker demand due to lower international migration, particularly among international students. Rent growth will be positive but marginal in all 3 years, limited by high supply and weakening demand.

Source: CREA, CMHC
The forecasts included in this document are based on information available as of January 14, 2025.

In 2025, total housing starts in the Kitchener – Cambridge – Waterloo (KCW) CMA are expected to rise after sluggish activity in 2024. This increase will be driven by multi-unit starts, as the development pipeline in KCW indicates there will be more purpose-built rental starts. This reflects a shift in developer focus away from condominiums encouraged by recent policy initiatives to encourage supply.

New condominium sales are weak in KCW, with declining investor activity and increasing unsold inventories. Many investors face negative cash flow and stagnant prices, which will lead to fewer starts in this segment.

Single-detached starts will increase marginally, with the increase being driven by pent-up demand. KCW will remain attractive because of its relative affordability.

MLS® home sales are projected to rise modestly in 2025. The KCW region continues to thrive largely because of its expanding technology sector, which remains a key source of housing demand and employment. Additionally, the rise of remote work has reshaped homebuyers' preferences, with many seeking properties that support work-from-home lifestyles, further supporting the housing market.

The MLS® average price is expected to see a moderate increase this year. The market will tighten with rising sales leading to increased competition and higher prices. The demand for single-detached homes will be a key driver of this price growth while the condominium market will remain soft due to less investor interest.

The purpose-built apartment vacancy rate is expected to increase in 2025. This is because of the increase in rental completions and reduced demand from fewer international students. As a result, the average rent for a 2-bedroom apartment is forecasted to rise at a slower pace. Rents will still grow because of rising operating costs and strong demand, due to affordability pressures in homeownership.

Source: CREA, CMHC
The forecasts included in this document are based on information available as of January 14, 2025.

In 2025, total housing starts in the London CMA will decline from their high levels in the previous year. This is mainly due to fewer rental apartment starts, as developers focus on completing the large number of projects started in 2024. Lower migration to London will discourage starts but housing supply shortages will renew growth in 2026 and 2027.

Single-detached starts will increase but remain below historical levels, with marginal growth in 2026 and 2027 because of strengthening population and incomes.

MLS® existing home sales are expected to be higher this year, with continued growth in 2026 and 2027. This increase will be driven by lower borrowing rates. The MLS® average price will rise due to higher demand. However, this growth will be moderated by high inventory levels. These levels will reduce bidding pressure.

The purpose-built rental apartment vacancy rate will increase in 2025 due to many rental completions and weaker demand from fewer temporary residents. However, population growth and a slowdown in rental completions in the later part of our forecast will stabilize vacancies.

The average rent for a 2-bedroom apartment will continue to rise but will do so more slowly than in recent years. New units with higher-than-average rents will raise the average. Increased supply in London will discourage landlords from implementing higher rent increases.

Source: CREA, CMHC
The forecasts included in this document are based on information available as of January 14, 2025.

Housing starts are expected to rise in the St. Catharines – Niagara CMA in 2025. Multi-unit starts will increase, driven by improved affordability and market optimism. Single-detached starts will also increase, ranging from 700 to 850 units this year. This growth is supported by lower interest rates and stronger demand from intraprovincial migration.

The region has experienced modest economic growth, a drop from elevated unemployment levels and sustained population growth through migration. Average household income has increased and continues to drive economic growth and housing activity.

MLS® sales are expected to increase moderately in 2025, continuing the upward trend that started in later 2024. This year's increase will be driven by out-of-town buyer interest in the more affordable St. Catharines – Niagara market, which is composed primarily of single-detached homes.

The MLS® average price is projected to rise modestly in 2025. Below-average sales and higher existing-home inventories will reflect cautious buyers. Currently, many transactions in the St. Catharines – Niagara CMA involve price reductions or conditional sales, signaling market conditions that have favoured buyers.

In 2025, the average rent for a 2-bedroom apartment is expected to rise, with demand still driven by affordability pressures in homeownership. However, lower international student enrollment will soften demand, leading to higher vacancy rates in 2025. Additionally, the influx of new supply should moderate the upward trend of rents. As a result, rents should grow, but at a slower pace than in recent years.

Source: CREA, CMHC
The forecasts included in this document are based on information available as of January 14, 2025.

In 2025, we predict lower housing starts in the Windsor CMA, driven by fewer condominium apartment starts. This follows an exceptional year in 2024, where the City of Windsor was one of the first municipalities to surpass its provincial housing targets.

The forecasted decline in 2025 will be balanced by increased single-detached, row and semi-detached starts. Additionally, we expect another year of robust rental apartment starts.

Market conditions are likely to tighten, reflecting increased resale activity in the later part of 2025. This will put upward pressure on home prices that will continue into the first half of 2026.

In the rental market, the average rent for a 2-bedroom apartment is forecast to increase more slowly in 2025. This reflects the trend observed over the last 2 years. Further rent increases are expected for newer units in Windsor. However, the average rent will stabilize and grow at a slower rate, especially in areas near universities and colleges. This is due to reduced demand from international students. In these same areas, market intelligence suggests that vacancy rates will continue to increase.

Source: CREA, CMHC
The forecasts included in this document are based on information available as of January 14, 2025.

Housing demand will remain strong in 2025 before losing momentum afterward

Population growth will continue in 2025 but more slowly than in the last 2 years. In Quebec, it has remained particularly strong despite a slight slowdown in growth in the number of non-permanent residents in 2024 (Figure 1). These trends will continue into 2025.

Household formation represents a significant share of housing demand, which will continue to increase in 2025. Employment rates should start rising again in 2025 in Quebec and Nova Scotia. Given the fairly robust job market, housing demand will remain steady in 2025.

Figure 1: Growth in the Number of Non-permanent Residents in Quebec Slowed Slightly in 2024
Quarterly Estimate of the Change in the Number of Non-permanent Residents in Quebec

Source: Statistics Canada Table 17-10-0121-01

We expect a decline in population following the moderate growth of 2025. We believe it will take some time before the announced reductions in immigration affect population levels. Therefore, population declines in most of the country's eastern markets won't be seen until 2026. Recent government measures will contribute to this slowdown, such as:

• The two-year federal cap on international student admissions (and other restrictions)
• The Quebec government's planned reduction of immigration targets

The Quebec government has said that it intends to reduce the number of international students as early as the start of the 2025 academic year. It has already put some immigration programs on hold in 2024. We expect that growth in housing demand on the rental market will start to decline in some regions starting in 2026.

Eastern rental markets will remain under pressure in 2025 but will ease slightly starting in 2026

A slight increase in vacancy rates is expected in most eastern markets in 2025. The rental market will remain under pressure because of sustained demand and the scarcity of vacant units (Figure 2). Strong competition between potential renters will continue as demand remains high.

In 2025, rental demand will remain strong in several eastern markets. This is in part because access to homeownership will remain difficult. However, in some census metropolitan areas (CMAs), increased supply will cause the vacancy rate to grow slightly this year. Rental markets should then ease slightly with the sharp increase in supply, as immigration decreases.

The increase in vacant units will reduce the pressure on rents to some degree. Overall, rents in eastern markets will increase slightly less than in 2023 and 2024. However, sustained demand for more affordable housing and the addition of thousands of new apartments (which tend to have higher rents) will keep an upward pressure on rents.

Figure 2: Eastern Rental Markets Will Remain Under Pressure Despite Slower Population Growth
Vacancy Rate (%), 2025 Forecast and 10-Year Average

Source: CMHC

The rebound in housing starts that began in 2024 will continue

Following weak levels in 2023, housing starts in several markets began to recover in 2024. They'll continue to trend upward in most major eastern markets in 2025.

Montréal in particular saw an increase in housing starts in 2024. More stable construction costs and better financing conditions will encourage new construction projects in 2025.

In Ottawa, growth in housing starts will level off in 2025. In the short term, housing starts in this CMA will remain at roughly the same levels as in 2023 and 2024.

Housing starts in Gatineau will decrease slightly in 2025. The limited capacity of some infrastructure and high vacancy rates for new rental units will slow construction.

We expect that rental units will continue to account for most new construction in all eastern markets. The need is great, developers are looking for opportunities and several initiatives continue to support the creation of new rental units.

Improved financing conditions will enable developers to carry out a number of rental housing projects. This trend will be supported by strong rent growth, low vacancy rates and ongoing initiatives that support densification.

In some eastern markets, lower mortgage rates and rising household incomes should slightly boost new ground-oriented home construction (single-detached, semi-detached and row homes). However, the few available lots are still expensive, limiting low-density construction. In addition, some municipalities are implementing regulations that promote density.

In eastern Canada, the environment will remain favourable to investors in rental housing projects in 2025. This market momentum should then fade in 2026 and 2027 as mortgage rate cuts end and population growth slows down. We expect the condominium apartment market to remain quite weak in all eastern markets, as few new projects have been announced.

We expect a rebound in sales supported by lower interest rates

In the main eastern markets, lower interest rates put the residential resale market back on track in 2024. Thanks to lower inflation and interest rates, household borrowing capacity has begun to increase. This has stimulated the resale market. In this context, we expect sales growth to continue in 2025.

In CMAs where sales didn't decline as much during the period of interest rate hikes, such as the Québec CMA, sales growth will be more moderate in 2025.

Over the medium term, sales growth will be held back by slower population growth in all markets. Access to homeownership will remain difficult, especially in major centres. Sales and price increases should slow in 2026 and 2027.

Prices will continue to rise in 2025 and stabilize later

Sales will increase a little faster than supply. Market conditions will therefore remain tight and support price growth. In 2025, the main eastern markets will record price increases similar to those seen in 2024.

Over the rest of the forecast horizon, price growth will vary by market:

• The most seller-friendly markets, Québec and Montréal will see significant price increases.
• The less tight Gatineau and Ottawa markets will see more moderate price growth.
• Halifax will have the lowest price increase (around 2%), due in particular to reduced interprovincial immigration.

We don't expect any significant improvement in housing affordability in the eastern markets over the forecast horizon. Property prices will remain a barrier to homeownership for many households.

Risks to the forecast

• The rental market could remain as tight as it was over the last 2 years if new immigration targets are met more slowly.
• In 2026 and 2027, the number of housing starts will be influenced by factors including the scope, nature and duration of any tariffs imposed by the U.S. Depending on how these tariffs impact regional economies, employment may be affected to some degree, along with business and consumer confidence.

Market insights

We expect population growth in Ottawa to slow starting in 2025 and to level off in 2026 and 2027. As a result of government initiatives, international immigration will decrease in the coming years. This slower population growth combined with the increase in rental stock will lead to a slight increase in the vacancy rate.

In this context, rent increases will slow from 2025 to 2027. However, conditions won't be enough to bring about rent decreases. The increase in average rent will be due to the arrival on the market of new units with high rents.

In 2025, as mortgage rates decrease, sales should continue to grow in Ottawa following the low reached in 2023. However, weak population growth and the small inventory of properties for sale will limit this growth. In a market that is relatively balanced between buyers and sellers, the modest price rebound that began in 2024 is expected to continue this year.

We expect housing starts to remain stable in Ottawa in 2025. The construction of multi-unit projects should slow somewhat, in part because of the high number of apartments under construction (Figure 3). Most of these units are intended for the rental market where the absorption of new units has recently slowed. This moderation in activity will encourage developers in this segment to be cautious.

Meanwhile, ground-oriented home starts should be less affected by this slight slowdown, especially in more affordable segments (such as semi-detached or row houses).

We expect housing starts to improve after 2025 in part due to a more favourable regulatory environment. The City of Ottawa is increasingly favouring density, which could accelerate housing starts over the medium and long terms.

Figure 3: The Substantial Supply Coming onto the Market Will Limit Housing Starts in the Ottawa CMA in 2025
Apartments Under Construction in the Ottawa CMA

Source: CMHC

Source: CREA, CMHC
The forecasts included in this document are based on information available as of January 14, 2025.

After one of its best years in 2024 (and in 2022), Gatineau will see the volume of housing starts decrease slightly in 2025. In 2026 and 2027, we expect activity to stabilize around 2025 levels.

Improved financing conditions and supportive government initiatives mean ground will be broken on a number of rental housing projects. However, some factors will have a negative impact on housing starts:

• The limited capacity of some infrastructure to allow for the construction of new housing
• Vacancy rates for new rental units that are higher than those for older units

The addition of new rental units won't be enough to ease the market in the short and medium terms. Demand remains strong especially in the lower rent ranges. This will keep the vacancy rate stable at low levels over the entire forecast horizon. Rents will therefore continue to rise.

Demand will also be strong on the resale market, in particular because of the decline in mortgage rates. We expect Gatineau's resale market activity to continue to increase in 2025.

Under these circumstances, average home prices in Gatineau will increase slightly in 2025, driven by:

• persistent buyer demand
• limited inventories on the resale market

Sources: SCHL, QPAREB by Centris®
QPAREB by Centris®. The Centris® system contains all the listings of Québec Real Estate Board.
The forecasts included in this document are based on information available as of January 14, 2025.

We expect the total number of housing starts in Montréal to increase for a second consecutive year in 2025. Rental units will remain the most commonly built housing type. More stable construction costs, better financing conditions and government incentive programs will continue to drive new rental project starts in 2025.

Some municipalities in the Greater Montréal area want to increase density and streamline project approval processes. These changes could help accelerate the pace of housing starts in the coming years.

Condominium apartment starts will remain low in the short term as there aren't many projects offering pre-sale units. In addition, the proportion of units sold in this way is currently low.

Despite losing some momentum over the past year, the Montréal labour market remains strong. In 2025, growth in employment and household income should continue to support increasing housing demand.

Driven by declining interest rates, recent population growth and rising incomes, the pace of property sales should continue to accelerate this year. Because sales slightly outpace supply, market conditions will remain tight and support price growth.

This market momentum should fade in 2026 and 2027. Sales and price growth will then slow down with the decline in mortgage rates coming to an end and more modest population growth compared to 2025.

With the growth in rental stock, the Montréal rental market will ease slightly in 2025. This trend will continue over the forecast horizon with the expected increase in rental housing starts and slowdown in population growth.

Sources: SCHL, QPAREB by Centris®
QPAREB by Centris®. The Centris® system contains all the listings of Québec Real Estate Board.
The forecasts included in this document are based on information available as of January 14, 2025.

The Québec CMA had a record year for home sales in 2020 followed by 3 years of slight declines during the pandemic. As in most eastern markets, sales picked up in 2024. This trend will continue in 2025. Like elsewhere, the increase in sales is supported by:

• decreasing interest rates
• strong employment (the Québec CMA has one of the lowest unemployment rates in the country.)

Strong demand will be accompanied by sustained price increases as supply remains limited. We expect prices to continue rising but more slowly than during the pandemic.

Housing starts should remain high in Québec in 2025. As in other eastern markets, rental units will remain the most commonly built housing type. However, limited infrastructure capacity poses a downside risk for housing starts, especially in Lévis.

The rental market will remain tight despite the slight increase in the vacancy rate expected over the coming years. Rental demand remains high, in part due to continued net positive migration from other regions of the province to the Québec CMA. The new units that will be added to supply won't be enough to ease the market. With vacancy rates still low, rents will continue to rise.

Sources: SCHL, QPAREB by Centris®
QPAREB by Centris®. The Centris® system contains all the listings of Québec Real Estate Board.
The forecasts included in this document are based on information available as of January 14, 2025.

Housing starts will increase in Halifax thanks to favourable financing conditions. As in most eastern markets, rental project starts will continue to grow and account for most of the volume. The outlook for rental project starts remains positive, even if it's not as strong as in the last 2 years.

Ground-oriented home starts (single-detached, semi-detached and row houses) have also rebounded in Halifax in the past few months after several quarters of significant declines. This is supported by declining mortgage rates and rising incomes. Wages in all sectors in Nova Scotia have increased significantly over the past 2 years, which has stimulated demand.

The arrival of new units on the market will push the vacancy rate up slightly. However, the main risk in the rental market is delays in the completion of housing units. This is because the construction sector is facing a shortage of workers and lower than expected productivity. These factors could limit the growth in supply. 

Source: CREA, CMHC
The forecasts included in this document are based on information available as of January 14, 2025.