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Economic Viewpoint

Desjardins Housing Outlook: National Housing Averages Are Obscuring Very Different Local Conditions

September 3, 2025
Kari Norman, Economist • Maëlle Boulais-Préseault, Senior Economist

Aggregate housing data are obscuring deep regional divides. Nationwide stability in homebuilding and the existing housing market is masking the fact that regions are moving in opposite directions, driven by sharp differences in local economic conditions and supply and demand disparities.

Toronto and Vancouver were once the epicentres of Canada’s real estate frenzy, with robust home sales fuelled by strong population growth, investor activity and the fear of being permanently priced out. But with interest rates now above pre‑pandemic levels and pandemic lows, and with falling asking rents making investing less appealing, sales activity in these markets has slowed considerably.

Our outlook for a rising unemployment rate and slowing income growth nationally comes as a large share of mortgages are up for renewal, capping any affordability improvement in 2025 and 2026.

Looking forward, we believe purpose‑built rental construction is likely to show continued strength thanks to a favourable policy and investment environment. However, lower federal immigration targets mean less demand as supply ramps up, keeping a lid on market rents. Ultimately, this will likely weigh on housing starts in the rental segment.

NOTE TO READERS: The letters k, M and B are used in texts, graphs and tables to refer to thousands, millions and billions respectively. IMPORTANT: This document is based on public information and may under no circumstances be used or construed as a commitment by Desjardins Group. While the information provided has been determined on the basis of data obtained from sources that are deemed to be reliable, Desjardins Group in no way warrants that the information is accurate or complete. The document is provided solely for information purposes and does not constitute an offer or solicitation for purchase or sale. Desjardins Group takes no responsibility for the consequences of any decision whatsoever made on the basis of the data contained herein and does not hereby undertake to provide any advice, notably in the area of investment services. Data on prices and margins is provided for information purposes and may be modified at any time based on such factors as market conditions. The past performances and projections expressed herein are no guarantee of future performance. Unless otherwise indicated, the opinions and forecasts contained herein are those of the document’s authors and do not represent the opinions of any other person or the official position of Desjardins Group.