Oct 27, 2026
Canadian home prices rose 101% after inflation between 2005 and 2025, the largest increase among Canada and 18 peer countries in a comparison by the Canada Mortgage and Housing Corporation (CMHC). Australia’s real house prices rose 79% over the same period, while the United States recorded a 30% increase.
CMHC points to a basic imbalance: Canada has fewer homes per person than most comparable countries, and demand has outpaced new supply for much of the past decade. Population growth played a role, alongside rising incomes and low borrowing costs that supported demand.
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“Canada’s housing challenge isn’t just that home prices rose. It’s that demand grew faster than supply for longer than in many comparable countries,” Aled ab Iorwerth, CMHC’s deputy chief economist, said in the corporation’s October 20 news release.
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Canada has fewer homes per person
CMHC puts Canada at 426 dwellings per 1,000 people, based on data from around 2022. That is below the OECD average of 468. Among the countries examined, only Australia, Ireland and New Zealand had fewer homes per person.
A larger housing stock gives a country more capacity to accommodate new demand. When more people are looking for housing than the market can readily supply, buyers and renters compete for the homes available. Where construction cannot respond quickly, that competition can push prices higher.
Population growth alone does not explain Canada’s results. Canada’s population grew 29% between 2005 and 2025, while real house prices (prices adjusted for inflation) rose 101%. New Zealand’s population grew by the same amount, but real prices increased 77%. Australia’s population grew 36%, while real prices rose 79%.
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The problem is the pace of supply
Canada continued building homes as prices climbed. Newly completed dwellings represented 1.2% of the existing housing stock in 2011 and 1.3% in 2022, slightly above the OECD average in both years.
But several peers increased construction more sharply. New Zealand’s rate rose from 0.9% to 1.8%, while Australia’s was about 1.7% in 2011 and 1.6% in 2022.
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The distinction is between building homes and building enough to keep pace with demand. Even steady construction can leave a growing shortage if the number of people seeking housing rises faster than the number of homes being added.
Because planning, approvals, infrastructure and construction take time, supply cannot always catch up quickly when demand rises.
Since the second half of the 2010s, CMHC says demand has generally outpaced supply in Canada. In 2023 and 2024, the country added almost five residents for every completed home. That ratio fell to 1.53 in 2025, which CMHC says likely reflects later changes in immigration levels.
The ratio indicates pressure rather than counting people left without homes: household size, vacant homes and where new housing is built also affect availability.
What this means for homebuyers
CMHC’s research helps explain why Canadian housing has become so expensive, but it cannot tell buyers whether prices will rise or fall next. A national comparison also cannot tell you whether a particular home is fairly priced.
For buyers, that means focusing on the local market rather than trying to time a national correction. Compare recent sales of similar homes in the neighbourhood you want, and look at how much choice buyers have. A market with few homes for sale may remain competitive even when demand cools.
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Don’t assume lower mortgage rates will automatically make homes affordable, either. Lower rates reduce borrowing costs, but they can also allow buyers to borrow more and compete more aggressively for a limited number of homes.
Before making an offer, calculate the full monthly cost, including your mortgage, property taxes, insurance, utilities, condo fees and maintenance.
Check that you could still manage the payments if your mortgage rate rises at renewal, and avoid stretching your budget simply because a lender approves a larger loan.
Ultimately, improving affordability will require Canada to add homes faster and more consistently. CMHC plans to study countries that have expanded construction at scale, but increasing supply takes time. Buyers should make decisions based on what they can afford today, rather than counting on a quick return to lower prices.
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Steven Brennan is a freelance finance writer based in Vancouver, BC. He holds a BA and an MA from Maynooth University, Ireland. His work regularly appears at Canadian Mortgage Trends, Lowest Rates, Loans Canada and other Canadian and U.S. brands.
