CMHC’s 2025 Market Outlook Unpredictable

The forecast is mostly gloomy from CMHC’s 2025 Housing Market Outlook

“We expect sales in Ontario and B.C. to remain below their 10-year averages. This is due to ongoing affordability chal lenges and the notable impact of new (lowered) immigration targets.” Prices here will “grow more slowly, especially in the first half of the forecast period.”

In Ontario, “Pre-construction condo apartments, often bought by investors, will see lower demand due to weaker resale and rental markets. This will lead to new construction slowing down.”

However, the outlook is so unpredictable that CMHC’s forecast has two different scenarios. A low-growth scenario sees high tariffs from the U.S. resulting in job losses and a recession. Inflation temporarily rises, but the central bank lowers the policy rate to support the economy. Financial uncertainty inches up borrowing costs, while tighter U.S. borders lead to higher-than-anticipated immigration in Canada.

This would delay the housing recovery, increasing pent-up demand. By late 2026, the economy will rebound, with a growing population boosting home sales, but rental markets will stay tight.

The alternative high-growth scenario sees the U.S. introducing 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, and stronger declines in borrowing costs make homeownership more attainable.

This would see more homes built thanks to better financing and business conditions. Stronger job and income growth combined with lower mortgage rates would make homeownership more accessible. But higher demand would push home prices up more quickly.