Canada’s housing slump set to persist through 2026, CMHC warns
Regional performance is expected to diverge sharply. Prairie provinces are forecast to hold onto stronger sales volumes and post the strongest price gains nationally, while Quebec’s more balanced conditions should produce steadier, if modest, increases. Ontario and British Columbia, by contrast, are expected to keep struggling with affordability pressures and softer overall activity.
CMHC expects housing starts to decline through the forecast window as builders contend with soft demand, swollen inventories and elevated building costs. That slowdown is expected to hit Ontario and British Columbia’s condo sector particularly hard, even as construction activity in the Prairies and Quebec cools from its recent highs.
Rental market
On the rental side, new supply is expected to keep easing back from the peak reached in 2025. CMHC cautioned that keeping rental construction at a sustainable pace will matter more as the economy strengthens later in the forecast period and additional renter households enter the market.
Vacancy rates are climbing in major centres such as Toronto, Vancouver and Montreal, which should slow the pace of asking-rent increases there, while Prairie rents are expected to see modest growth on the back of comparatively firmer demand. Even so, rents relative to income are expected to remain a persistent strain nationwide.
Kevin Hughes, CMHC’s deputy chief economist, said falling prices alone haven’t been enough to lure buyers back into the market.
