OTTAWA — The Canadian Home Builders’ Association’s (CHBA) 2025 Q2 Housing Market Index (HMI) reiterated much of the same findings as Q1, with builders still pessimistic about sales conditions.
CHBA’s single-family HMI is 24.9 (out of 100) and the multi-family HMI is 22.8, which are near record lows, and “firmly in negative builder sentiment territory for the 12th straight quarter, particularly in Ontario and British Columbia.”
There is also a noticeable downward trend in sales conditions of multi-family developments in the Prairie provinces since last year, which indicates lower housing starts are in store for the Prairies if the status quo remains unchanged.
“The markets in Ontario and British Columbia, in terms of sales of units for ownership, remain in horrible shape. The GST relief that was promised and would help to a degree is now instead doing the opposite and slowing sales in all regions, since while buyers ‘qualify’ now, they remain uncertain until the legislation passes. It is imperative that the legislation actioning the new First-Time Home Buyers’ GST Rebate be passed as soon as parliament resumes in September to help make housing more affordable,” said CHBA CEO Kevin Lee in a statement. “To really make a difference, the GST relief should also be broadened to include all purchasers of new homes, and the threshold increased to $1.5 million and $2 million in more expensive markets like Vancouver and Toronto. It should also be applicable to Accessory Dwelling Units (ADUs) and secondary suites, which are important forms of new housing.”
Housing starts data released from the CMHC recently shows the total monthly SAAR of housing starts for all areas in Canada was flat at 0.4 per cent in June compared to May.
“While interest rates have come down slightly over the past year, and the federal government has made some strategic policy moves – like 30-year amortizations for first-time buyers and buyers of new construction homes – to help, lack of consumer confidence driven by the trade war, and extremely high construction costs (especially in B.C. and Ontario, where much of those elevated construction costs are driven by municipal taxes and policies), continue to suppress new home buying activity, especially in the more expensive markets where the most new housing is needed,” the CHBA notes.
One out of five builders is extremely concerned about the wellbeing of their business over the next 12 months, and 35 per cent have had to make layoffs, which is up from 21per cent this time last year.
“The housing affordability and supply crisis is complex and there is no magic bullet solution,” added Lee. “Canada needs comprehensive and supportive government policy at the municipal, provincial, and federal levels to help build more homes and improve affordability. We need to continue to value careers in the skilled trades, developing our workforce and ensuring our immigration policies attract workers into the sector. Options like factory-built construction can have a lot of potential, but without sustained demand and certainty of sales — an elusive state in the boom-bust housing market — those kinds of investments are risky and not realistic to expect.
“As we heard from builders in this quarter’s HMI, industry adoption remains slow due to lack of demand and the substantial overhead needed to operate a factory. Policies that drive better affordability and increased housing supply in general are needed to also unlock the potential of factory-built approaches. It took Canada years of underbuilding to get into this situation, and we won’t get out of it overnight, but there is a lot that can be done if all levels of government step forward.”
