New home selling conditions reach critical low point for future industry capacity: CHBA 

The latest quarterly Housing Market Index results published by the Canadian Home Builders’ Association (CHBA) continue to raise red flags and signal even fewer future housing starts for homeownership.

The results also warn of diminished long-term industry capacity if layoffs continue and strategic action is not taken to help the market rebound soon.

The Q4 single-family index fell again, dropping 5.5 points to 19.6 out of 100, marking the second consecutive record low and the first time the single-family HMI has fallen below a score of 20.

The multi-family index also saw a second consecutive record low, with a score of 14.7, which is down 7.3 points from a year ago. Ontario and British Columbia continue to struggle and lead the way in “broad pessimism” among both single- and multi-family builders.

With Ontario and B.C. already at extremely low levels, the further decline in the national HMI this quarter was driven largely by sharp drops in the Prairie provinces. These declines produced the first pessimistic reading in two years among single-family builders, while the multi-family HMI fell further into negative territory, continuing the downward trend that began in the second quarter of 2024.

Despite having been announced in March 2025, the enhanced GST Rebate for first-time buyers of new homes still has not become law. This continues to hurt new home sales by keeping first-time buyers on the sidelines.

“The federal government has shifted its focus away from housing affordability for middle-income Canadians. Support for non-market housing is important, but it should not come at the expense of measures to improve market-rate housing affordability; both can be improved. It’s time for the government to re-focus on measures to support average Canadians and homeownership,” said CHBA CEO Kevin Lee.

A recent public opinion study by Abacus Data for CHBA showed that 88 per cent of Canadians under the age of 45 would like to own a home one day. However, only 29 per cent of all non-homeowners are confident they’ll ever be able to buy a home.

CHBA noted that Canadians see the housing crisis as a “systemic failure affecting the middle class as much as low-income households,” and a total of 66 per cent say the federal government is most responsible for solving the crisis.

Builders agreed that the single most impactful policy the government could implement to turn new home selling conditions around quickly would be to expand the federal GST rebate on homes under $1.5 million to all buyers, rather than just first-time buyers. It should also be extended to renovations that create new housing units.

CHBA also noted that another factor contributing to a lack of affordability is development taxes, and that the federal government must work with the provinces and municipalities to lower development taxes.

A third measure that would immediately help with affordability is fixing the stress test, which is cautious and locks well-qualified buyers out of the market or keeps them from buying the home that best suits their needs.

“The Q4 Housing Market Index indicates that home selling conditions have reached a critical low point for future industry capacity, with 38 percent of members reporting layoffs. If changes aren’t made now, it will be much harder for the residential construction industry to ramp up in the future and build the homes that Canada needs to correct the housing supply deficit and improve housing affordability for the next generation,” said Lee.