OTTAWA — Poor selling conditions are leading to a further decline in the sentiment of the country’s homebuilding industry, reports the Canadian Home Builders’ Association’s (CHBA) 2024 Q4 Housing Market Index (HMI).
Poor sales of single-family and multi-family homes through Ontario and British Columbia, with other areas of the country also dipping since the previous quarter, and a weak outlook for the near future, were outcomes shown in the HMI.
The single-family HMI slid another 2.5 points nationally from the previous quarter, down to 25.1, which is just 0.5 away from its record low. The multi-family HMI did reach a record low, dropping 6.5 points from the previous quarter to 22.0, which is four points below the previous record low in the fourth quarter of 2022.
Sales of new homes are healthier in regions of the country where ownership cost-to-income ratios are lower, reflecting better affordability.
Ontario’s multi-family HMI reached a new low of 6.2, and British Columbia’s single-family index is similarly alarming at 10.5, the report notes.
“While the situation is not as dire in the Prairies, where the year finished at a neutral sentiment range, the multi-family HMI there did fall over 10 points from the previous quarter,” a release states. “The single-family HMI for Atlantic Provinces fell for a second consecutive quarter, and while still a neutral reading, their HMI is six points lower than a year ago.”
Nineteen per cent of builders stated the high cost of construction as a top challenge for 2025 with municipal government taxes and lengthy approval timelines adding considerably to the cost to build a home and keeping home prices elevated.
Builders also reported that non-lumber material costs have added $36,000 to the cost of constructing a 2,400-square-foot home relative to just the end of 2023. Softwood lumber, which is used for framing, has gone up between 10 to 18 per cent in the last year.
“Although the federal government has correctly recognized that we are in a housing crisis and we need to double home construction starts in order to correct the supply shortage and help improve housing affordability, conditions have not enabled homebuilders to ramp up,” said CHBA CEO Kevin Lee in a statement.
“Builders across the country are keen to build, but with no buyers, and with increasing costs of construction, including development taxes, they simply cannot build. Sadly, the majority of HMI respondents reported that they had fewer housing starts in 2024 than they did in 2024 – a reduction of 50 per cent on average, reflecting the drops we are seeing in builds for homeownership. Interest rates need to keep coming down and be reflected in mortgage rates, and the stress test needs to be more fluid. Importantly, government policy at all levels should focus on decreasing taxes on new homes, reining in runaway development charges, and eliminating costly lags in development approvals.”
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