Homeownership Dreams Dimming as Policy Gaps and Layoffs Shake Industry

OCTOBER 30, 2025 – OTTAWA, ON – The Canadian Home Builders’ Association (CHBA) Housing Market Index (HMI), published quarterly, has dropped to record lows in Q3, reflecting growing concern among builders over sales, trade uncertainty, and a lack of supportive government policy for homeownership. CHBA’s single-family HMI reached a low of 23.3 out of 100, while the multi-family HMI was 16.8. This points directly to fewer housing starts ahead for Canadians hoping to own a home, and big challenges for the government’s pursuit of doubling housing starts.

So far in 2025, housing starts for ownership are down nearly 10,000 compared to last year. This decline is driven by low consumer confidence, rising construction costs, and punitive taxation at all government levels. Despite federal promises to address the housing shortage, which in turn will support affordability, federal policy is currently primarily focused on rental housing and government-subsidized units, with limited recent action on homeownership—especially for younger generations.

“If we don’t continue to reform housing policies to better support ownership—including reducing taxation—homeownership rates will keep falling. Doubling housing starts to 500,000 units per year is impossible if middle-class Canadians can’t afford homes,” said CHBA CEO Kevin Lee.

CMHC’s Fall 2025 Housing Supply Report underlines the issue: “The drop in ground-oriented construction in high-cost markets may signal a lasting decline in homeownership rates and a prolonged slowdown in housing starts.”

The next generation expects that good jobs should make homeownership possible. Without urgent policy changes, declining ownership rates will widen the divide between haves and have-nots. Budget 2025 is a critical opportunity, but decisive measures remain uncertain.

The industry is also facing significant employment challenges. While much has been made of the labour shortage, falling starts in key regions are instead resulting in layoffs which will leave industry without capacity if/when the market comes back. After months of sluggish activity and delays in promised GST rebates for first-time buyers, 41% of HMI builder respondents report layoffs nationally, with Ontario hardest hit at 64%. After months of sluggish activity and delays in promised GST rebates for first-time buyers, 41% of HMI builder respondents report layoffs nationally, with Ontario hardest hit at 64%, where residential construction payrolls show the steepest 12-month decline since the 2009 sub-prime crisis, excluding the pandemic.

In response to market pressures, 39% of builders have shifted or are considering shifting to rental developments, in addition to those that built rental previously. While Canada needs housing of all types, the drop in ownership-focused construction—from 70% in 2021 to just 50% today—risks undermining Canadians’ long-held aspirations to own their homes.

Momentum from previous federal initiatives, like the 2024 Canada’s Housing Plan that was making important policy steps to support homeownership, has stalled in 2025. The promised GST relief for first-time buyers remains unpassed, stalling construction and sidelining buyers over recent months. Immediate passage and expansion of that GST relief to all buyers is essential, especially in provinces like Ontario, to revive housing starts and stabilize the market. Local development taxes, up over 700% in two decades, also require urgent reform.

“Canada needs much more housing of all kinds to address housing affordability challenges, and housing policy cannot focus only on affordable housing and purpose-built rental without also having supportive policy for homeownership for the average Canadian. Without action, falling homeownership rates will intensify pressure on rental and social housing, and the pursuit of doubling housing starts will be futile. Patience is running out for middle-class Canadians who expect they should be able to own a home, but don’t see more action that will directly support them.”

A longer form article on this topic can be read here.

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MEDIA INQUIRIES

Journalists wishing to interview Kevin Lee, Chief Executive Officer of the Canadian Home Builders’ Association are encouraged to submit their request by email to media@chba.ca.

 

About the HMI

CHBA’s HMI provides a leading market indicator for both the single-family and multi-family markets in Canada, before permits and starts. Released on a quarterly basis, the HMI provides insight into the industry, including many of the issues that are affecting housing affordability, with a strong correlation to future housing starts. The data for the CHBA HMI comes from an exclusive panel of hundreds of CHBA home builders and developers from coast to coast. Every quarter, this panel responds to a series of questions about market conditions. CHBA then uses proprietary statistical analysis to prepare the quarterly HMI. In addition to the standard HMI questions, each quarter CHBA asks “special questions” that allow the Association to gather data and insights into current issues affecting the industry across the country.

For more information on CHBA’s HMI, including the detailed methodology and key takeaways, please visit the official CHBA HMI webpage.