Canada is in the middle hierarchy of international homeownership rates, hovering around 68%, according to Statistics Canada (StatCan). That’s a slight decline from about 70% over the past decade, as prices have risen and affordability has become an issue, particularly with younger demographics. Still, the housing industry is a major contributor to the Canadian economy, supporting 1.2 million jobs and generating $143 billion in gross domestic product last year, according to a StatCan report released this week. The report showed investment in residential housing rose 2.5% to $237.7 billion in 2024, while the number of homes in Canada increased by 1.6%, to 7.2 million. The largest increase in new homes last year was in Ontario, adding 99,000 new homes, followed by Alberta (up 51,000) and Quebec (up 50,000), with apartments being the majority of new dwellings in each case. StatCan said apartment construction attracted a 6.9% increase in investments, which offset a decline in dollars being spent on single-family homes and slower renovation business. The pace of investment in 2024 varied across the country with most regions seeing an increase in spending, with the exceptions being Ontario and BC, while Alberta and Quebec posted the strongest gains. .For most Canadians, home is more than where the hearth is. Home is an asset that has traditionally increased in value as time goes on. In fact, the StatCan report says the total value of Canadian housing assets climbed to $4.2 trillion in 2024, accounting for 25% of all national wealth. Even with the increase in construction and investment dollars up to 2024, Canada’s housing stock is getting older, with the average ‘remaining useful life’ of homes declining to 58.9% in 2024, meaning, on average, homes are just over halfway through their expected lifespan. But turn the corner into 2025 and a different scenario is emerging, with the largest monthly drop in residential construction investment since 2021, falling by 4.5% in April to $15.5 billion, which, from a dollar point of view, was the steepest monthly decline in three years. StatCan reports total investment in all building construction declined 3.2% to $22.3 billion, led by a large $441 million drop in multi-family home construction, with six provinces and all three territories seeing declines, and Ontario accounting for most of the drop, with a decline of $410 million. Single-family home construction didn’t escape losses, dropping $282 million nationally, led by Ontario, down $181 million and Alberta, down $121 million. .Non-residential building investment remained flat in April, dropping a slight 0.3% to $6.8 billion, which includes commercial, down 1% and industrial, down 0.8%, against a 1.3% rise in institutional investment. Commercial construction was down in seven provinces and two territories, again led by Ontario (-$23.2 million). Industrial investment fell most in Quebec, while Alberta led the growth in institutional spending, which rose by $13.1 million in the province. Housing markets across Canada have cooled from the buying and selling frenzies experienced between 2021 and 2024. The buyers’ pool has diminished and while those in the market, but shopping yet, are facing higher interest rates, as are builders, with both challenged by housing affordability, leading to the downturn in investment, says Canadian Mortgage Trends. “On a seasonally adjusted basis, residential construction has now declined in four of the past five months,” says CMT. “That’s despite a slight drop in inflation-adjusted residential investment, as higher renovation costs and a slowdown in single-family construction took a toll.” Looking forward, the number of building permits issued, which is an indicator, but not a guarantee, of future construction, fell 6.6% in April, with an 11.6% decline in residential construction. .“That was followed by a subdued May housing starts report, with Canada’s annual pace of starts edging down slightly to 279,510 units,” says CMT. “Starts fell sharply in key markets like Toronto (down 22%) and Vancouver (down10%).” The slowdowns in all levels of activity come as Canada Mortgage and Housing Corporation estimated last week that up to 4.8 million homes need to be built over the next decade, between 430,000 to 480,000 each year, for housing affordability to return to 2019 levels, roughly twice the number of homes being built each year in Canada.
