As of July 2025, Canada is building more than two homes for every person added to its population, and that has not made housing cheap. Construction was about 10 percent lower than a year earlier, but population growth was about 92 percent lower, so the ratio improved while prices stayed where they were. They stayed because the cost of land, labour and materials had all risen by July 2025, and many builders had government financing behind them, so none of them had to discount.
I am Moe Asgarian, a real estate broker in Toronto, and I follow the monthly reports because they decide what I tell a client who is thinking about waiting another year. Three of them landed by early July 2025: housing construction against population growth, the condo market, and household debt. Each one says something different about the same market.
Two Homes for Every New Resident in the First Quarter of 2025
The number that surprises people is the ratio itself. In the first quarter of 2025, Canada built more than two homes for every single person added to the country's population. That is not because builders sped up. Housing starts in that quarter were about 10 percent lower than the year before. Population growth was about 92 percent lower, and when the denominator collapses like that, the ratio looks excellent. If the pace holds, Canada genuinely begins closing the gap between homes and people. The gap is the part to keep in mind: as of July 2025 the stock of housing measured against population was still in bad shape, so a better flow of new homes only chips away at a shortage that took years to build.
Why More Building Has Not Made Homes Cheaper
Supply and price are not the same lever. As of July 2025 the cost of land, labour and materials had all gone up, and that floor sits under every new unit. Then there is the question of who is building. A large share of projects were going up with government loans and support behind them, which means the developer is not sweating the sales pace and has no reason to cut a price to move inventory. Instead of holding supply and demand in balance, that kind of help takes the pressure off the biggest companies. More homes, same prices.
Ottawa Is Not Trying to Lower House Prices
This is the part I wish more buyers heard plainly. In an interview some time before July 2025, the federal housing minister said the government has no plan at all to bring down the price of existing homes. The goal is affordable options: rental housing, and cheaper formats such as the prefabricated homes I have written about before. Read that honestly and the strategy is to add a lower rung to the ladder, not to move the ladder. So if you are waiting for policy to discount the house you already want, as of July 2025 nobody in Ottawa was promising that.
Condo Prices Fell for a 19th Straight Month
The condo report was the clearest price signal in the batch. Prices had fallen for 19 consecutive months, which put a typical Canadian condo at about $492,500 in May 2025, the lowest level since 2021 and roughly 12 percent, or about $69,000, under its earlier peak. Year over year the figure was down 4.5 percent, the largest 12 month decline since 2023. Condos had been holding up better than the rest of the market, and by May 2025 that resistance was breaking. Sales were thin, inventory was heavy, and sellers had stopped waiting for a miracle. The long tariff fight appears to have pushed many of them to accept a lower number. A unit that used to be the safe investment was turning into the risky one, with falling value, high carrying costs and a hard sale at the end.
Household Debt Is Climbing Again
The third report, from the Canadian Real Estate Association, looked at household balance sheets, and the trend there is not comforting. The debt to income ratio published by Statistics Canada reached 173 in the first quarter of 2025, which works out to roughly $1.74 of debt for every dollar of after tax income. It had been lower the quarter before, and this was the second quarterly increase in a row, though still below where it sat a year earlier. The cause traces back to the rate cuts of 2024. Payments felt lighter, so people borrowed more, and the lower rate that first pulled the ratio down ended up pushing it back up. A low rate is a painkiller, not a cure. Borrow to the edge of what the payment allows and you are exposed to the next shock, whether that is a job loss or another jump in prices.
If you are deciding whether to buy, sell or hold in a market like this, I would rather look at your actual numbers than talk in averages. Fill out the form at the bottom of this page or book a free consultation, and we will go through them together. Stay well and take care.
Frequently asked questions
Was Canada building enough homes as of July 2025?
Measured against population growth, yes, by a wide margin. In the first quarter of 2025 Canada was building more than two homes for every person added to its population, because housing starts were down about 10 percent year over year while population growth was down about 92 percent. Measured against the shortage already in place, the stock of homes per person was still in poor shape at that time.
Does more construction make houses cheaper in Canada?
Not on its own. As of July 2025 the cost of land, labour and materials had all risen, and many projects were being built with government loans and support, so those builders were not under financial pressure to sell for less. Extra supply eases a crisis, but it does not force prices down by itself.
How far had condo prices fallen by May 2025?
A typical Canadian condo was about $492,500 in May 2025, the 19th straight monthly decline and the lowest level since 2021. That was 4.5 percent below the same month a year earlier, the biggest 12 month drop since 2023, and roughly 12 percent, or about $69,000, below the earlier peak.