CALGARY — Canada’s housing slowdown is expected to deepen over the next two years, according to the federal housing agency, casting doubt on repeated Liberal claims that more homes are being built to improve affordability.As first reported by Blacklock’s Reporter, the Canada Mortgage and Housing Corporation (CMHC) said housing starts are projected to decline through 2027 as builders scale back construction amid unsold inventory, elevated construction costs and weak market demand."Housing starts are expected to decline further as builders continue to respond to unsold inventories and high construction costs," CMHC said in its Summer Update: 2026 Housing Market Outlook.The agency said historically low levels of construction will be most pronounced in Ontario and British Columbia, particularly in the condominium market, while housing starts are also expected to fall across the Prairies and Quebec.Canada recorded 241,171 housing starts in 2025. CMHC now forecasts that number will slip to 238,971 this year — less than half of the federal government's stated goal of 500,000 homes annually, a target Ottawa has said is necessary to restore housing affordability.The report said housing activity has been weaker than anticipated in 2026, with sluggish sales and declining prices reflecting slower population growth, economic uncertainty, high mortgage rates and modest income growth."Housing activity will remain weak in the near term as very slow population growth, uncertainty, high borrowing costs and modest income growth continue to limit demand," the report said..Canada housing starts expected to fall again as affordability targets slip further out of reach .CMHC expects home sales to recover gradually over the coming years but remain below the levels typically seen over the past decade. It also forecasts continued downward pressure on both home prices and new residential construction.The findings stand in contrast to repeated statements from Prime Minister Mark Carney, who said as recently as July 20 that the federal government was "building more homes, faster."The Liberals also campaigned in the 2025 federal election on what they described as "Canada's most ambitious housing plan since the Second World War."Housing Minister Gregor Robertson has similarly defended the government's approach, telling the House of Commons Ottawa was focused on building at a much larger scale and would use every available federal tool to increase housing supply.The latest CMHC forecast also reinforces conclusions reached by the Parliamentary Budget Officer last year. In a June 11, 2025 report examining the government's GST rebate for first-time homebuyers, the budget watchdog estimated annual housing starts would peak at roughly 262,000 by 2030 — still well below Ottawa's 500,000-home target.For comparison, the highest number of housing starts ever recorded in Canada was 273,200 in 1976.CMHC has previously acknowledged that even significantly increasing construction would not deliver quick relief for Canadians struggling with affordability.In a 2025 commentary examining housing construction timelines, CMHC chief economist Mathieu Laberge estimated it could take as long as 30 years before enough housing becomes available to restore affordability for low- and middle-income Canadians."CMHC research shows this could take up to 30 years," Laberge wrote. "This is much too long for Canadians looking for a more affordable housing option now."
