Canada’s Housing Prices Rise Faster Than in Most Developed Countries

Housing prices in Canada have risen faster than those in most developed countries, more than doubling since 2005, according to a recent report examining national housing trends and comparing them with other countries. The findings suggest that the country’s housing affordability challenges are largely driven by demand growing faster than supply over an extended period.

One of the key factors behind rising prices is population growth, which has significantly outpaced new housing construction. Researchers found that nearly five new residents were added for every housing unit completed in 2023 and 2024. Other contributing factors include low borrowing costs, rising incomes and the inability of housing supply to keep up with growing demand.

Housing affordability began deteriorating in major cities in the early 2000s before spreading to other urban centres during the following decade. What initially emerged in western Canada later affected cities across the country, highlighting how the affordability crisis expanded over time rather than remaining limited to a particular region.

Following the 2008–09 global financial crisis, Canada experienced relatively modest declines in house prices, followed by steady growth that continued until 2022. Similar trends occurred in some other developed countries, while the United States experienced a much sharper price decline during the crisis. Even if Canada underwent a correction comparable to that of its southern neighbour, its house prices would still rank among the fastest-growing internationally.

The report emphasizes that Canada’s housing affordability challenges developed over many years and cannot be attributed to a single event. Population growth, including migration, has played a significant role in increasing housing demand, with countries experiencing faster population growth generally seeing stronger inflation-adjusted house price increases. Over the past two decades, Canada recorded the highest house price growth among several countries with similar population and housing trends, underscoring the need to address the long-standing imbalance between housing supply and demand.