The data from Canada’s latest Housing Market Index (HMI), published quarterly by the Canadian Home Builders’ Association (CHBA), fell yet again in Q3 to new record lows. This reflects a growing concern among builders over sales, trade uncertainty, and a lack of supportive government policy for homeownership.

CHBA’s single-family HMI fell to 23.3 out of 100, while the multi-family HMI was 16.8, pointing to big challenges for the government’s goal 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 this 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 assumes that good jobs will make homeownership possible, but without urgent policy changes, declining ownership rates will widen the divide between those who hold assets and those who do not. CHBA says Budget 2025 is a critical opportunity, but decisive measures remain uncertain.

The industry is also facing significant employment challenges. Falling starts in key regions are resulting in layoffs, which will leave industry without capacity if/when the market rebounds.

After months of sluggish activity and delays in promised GST rebates for first-time buyers, 41 per cent of HMI builder respondents report layoffs nationally, with Ontario hardest hit at 64 per cent. Residential construction payrolls show the steepest 12-month decline since the 2009 sub-prime crisis, excluding the pandemic.

In response to market pressures, 39 per cent 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 per cent in 2021 to just 50 per cent today—risks undermining Canadians’ long-held ownership aspirations.

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 per cent 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,” said Lee. “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.”