Canadian housing has been the defining macro problem of the post-2020 era — affordability deterioration that outpaced every income measure, immigration intake that ran ahead of supply, and a political conversation that became impossible to win. The setup has now meaningfully shifted. Construction completions have risen, immigration intake has slowed, and the net household formation versus completion gap has narrowed for four consecutive quarters. Rents have followed with a lag. The affordability improvement is real but small and easily reversed if any single input changes.
Key takeaways
- Completions have risen materially.
- Immigration intake has slowed.
- Rents have softened for the first time in a decade.
- The affordability gap remains large but is no longer widening.
What produced the improvement
Federal and provincial policy alignment around supply, a slower permanent resident intake target, and meaningful new starts under federal financing programmes. The improvement is the joint product of all three.
- Federal-provincial alignment: better
- Permanent resident targets: lower
- Apartment starts: meaningfully higher
- Builder financing: more accessible
What still needs to happen
Provincial zoning reform — uneven across jurisdictions — and continued completions discipline.
Where rents have softened most
Toronto and Vancouver downtown cores, with smaller adjustments in suburban markets.
What could reverse it
A return to the higher immigration intake path or a construction-cycle downturn.
Canadian housing starts (units per quarter, smoothed)
| Year | Annualized starts |
|---|---|
| 2022 | ~270k |
| 2024 | ~250k |
| 2025 | ~290k |
| 2026 | ~310k |
The fastest way to fix housing was always supply plus pace-management on demand. Both finally moved.
Frequently asked questions
Are rents falling?
Softening, particularly in the largest cores.
Is the improvement durable?
Conditional on continued supply discipline.
What's the residual risk?
A return to higher immigration intake without matching supply.
The bottom line
Canadian housing affordability has stopped getting worse. That alone is a regime change.
