Canadian home sales and prices expected to rebound this year, though trade war clouds outlook

A real estate sign is posted outside a home in Pointe-Claire, a city in Montreal's West Island, Tuesday, May 7, 2024. THE CANADIAN PRESS/Christinne Muschi

Based on new statistics released by the Canada Mortgage and Housing Corporation (CMHC), construction projects for houses in Canada will drop off over the next several years but remain above their 10-year average.

In 2024, the federal government predicted more than 500,000 new houses would be under construction per year until 2031.

According to the CMHC, those numbers will be lower; with fewer than 250,000 new homes built in 2025, less than 240,000 in 2026 and in 2027 there will be fewer than 235,000 new homes under construction in Canada.

‘We can’t be overly selective’

Cassandra McMullin wants to move with her family from Grand Prairie, Alta., to Nova Scotia. Finding a new home that is a good fit has proven to be difficult.

“Even if they build those new houses, we would not be able to afford a new build,” said McMullin, who added, based on price and lack of options, her family can’t be overly selective about where they buy their next home.

“We have to look at the entire province and find the house that fits us and we’re going to have to deal with being in the province, even if that is not close to family.”

“Our government is closely monitoring the Canada-U.S. trade landscape and is laser-focused on protecting and defending our national interest, especially when it comes to the housing market,”

The office of the Minister of Housing, Infrastructure, and Communities Canada told CTV News.

The factors at play

Halifax-based commercial and residential developer Wadih Fares says the GST/HST holiday has been a boost for the construction industry, but a labour shortage and overseas supply chain issues have caused a slowdown.

The industry is also bracing for changes to immigration policies and the threat of a potential trade war.

“And the interest rate is also still very high. So really, projects are coming in at a very high cost,” said Fares. “It is becoming a bit less viable for developers.”

The CMHC also reports detached and semi-detached homes are still being built at a high rate, especially when it comes to more affordable rowhouses.

The corporation projects rental affordability will improve soon, based on a projected increase of higher vacancy rates in Canada.

“Even with all of new policies on immigration the demand is still there, and the opportunity is still there,” said Fares, who added affordability will still be a program for Canadian renters. “There is a bit of vacancy … but in the high-cost market.”