Canadian Real Estate Prices Slide and Builders Start 2 Homes Per Person Added

In the first quarter of 2025, Canadian house prices edged lower as demand continued to cool across major regions. Sales remained sluggish and inventory levels rose, reinforcing early signs of a buyer’s market in several cities. A report from economists warned that corrections in housing tend to stretch out over years—not months—and with prices down over 3 percent compared to last year and nearly 18 percent below the 2022 peak, they expect sluggish pricing ahead unless demand picks up.

At the same time, a remarkable housing milestone emerged. Builders broke ground on more than two new homes for every person added to Canada’s population in the first quarter—marking a shift toward oversupply relative to recent population growth. That translated to roughly 2.35 new homes started for each person added in that quarter.

Despite the encouraging ratio, it came during a period of high starts. Total new home construction fell about 10.5 percent from a year earlier, with around 47,300 homes begun in Q1—making it the lowest quarter since early 2023. Nonetheless, population growth plunged sharply, down over 90 percent from prior levels, which allowed starts to outpace net population additions.

On the whole, however, Canada is still far from reaching its longer-term construction targets. Housing agencies have suggested that to restore home affordability to 2019 levels by 2035, housing starts would need to accelerate to three times the current pace. That would push the ratio to about six homes per person added—far above the current two.

Experts note that simply boosting supply doesn’t guarantee lower prices when other factors aren’t neutral. Building costs, lending support, and institutional landlord behavior all influence final prices. In many cases, government subsidies and financing structures shift market power toward developers and investors, muting downward pressure on prices even when new units become available.

The combination of sliding prices, rising inventory, but high construction levels presents a split picture. Buyers may find more opportunities in coming months, but broader affordability hinges on whether housing starts accelerate enough and whether demand strengthens. Without both, modest price drops could persist even as the country builds at a pace that now comfortably exceeds population growth.