Why Canada’s house prices have outpaced peers over the past two decades

Canada’s inflation-adjusted house prices have more than doubled since 2005, according to new research from Canada Mortgage and Housing Corporation (CMHC). That pace outstripped most developed countries.

The new report is part of CMHC’s International Series. It concludes that demand grew faster than supply for longer in Canada than in many peer countries. Population growth, rising incomes and low borrowing costs fuelled that demand.

“Canada’s housing challenge isn’t just that home prices rose,” said Aled ab Iorwerth, CMHC’s deputy chief economist, in a news release. “It’s that demand grew faster than supply for longer than in many comparable countries.”

For brokers, the findings give context for client conversations about why affordability remains stretched. They also show the problem did not simply follow a global trend.

Prices rose faster than in peer countries

Real prices rose 101% between 2005 and 2025, CMHC figures show. Australia, which has a similar policy framework, saw a 79% increase.

Canada, Australia and Sweden saw only modest price dips during the 2008–09 global recession. All three then posted steady growth through 2022. The US and UK saw sharper corrections.

The key difference was what happened afterward, the report says. “Canada’s house prices continued to grow rapidly for over a decade, eventually outpacing most peer countries,” the report noted.

Even a US-style correction would not have changed that, CMHC found. Canada would still rank among the fastest-growing markets in its comparison.

Population growth played a major role. Canada’s population grew 29% over the past 20 years. Among open-economy peers such as Australia, New Zealand, Norway and Sweden, Canada posted the steepest price increase after adjusting for population growth. Urbanization alone did not explain the gap, CMHC said.

CMHC’s chart shows real prices peaked in 2022 and have eased since.

Supply gap persists as construction slips

Construction itself was fairly steady. Completions equalled 1.2% of the housing stock in 2011 and 1.3% in 2022, above the Organization for Economic Co-operation and Development (OECD) average. But in 11 of 17 comparator countries, completions grew by a larger margin than in Canada.

Population then outpaced building. Canada added nearly five new residents per housing completion in 2023 and 2024. The ratio later fell to about 1.53, which CMHC says likely reflects later changes in immigration levels.

Canada also has fewer homes per person than most peers and the OECD average. Sweden and Norway have larger housing stocks, which may have moderated their price gains.

Recent data suggest the gap has not closed. CMHC’s latest housing starts show the annual pace rose 3% in September to 248,896 units. But actual starts in centres of 10,000 or more fell 11% from a year earlier, to 19,984.

Ab Iorwerth said Canada still faces a long-term supply gap. Affordability gains since 2023 will be hard to sustain without more construction, the Canadian Press reported.

On the demand side, Statistics Canada estimates the population grew by about 80,000 in the second quarter, to roughly 41.8 million. The Bank of Canada held its rate at 2.25% on Sept. 2. Its next decision is Oct. 28.

A forthcoming CMHC review of 10 peer countries will examine how they scaled up construction. Themes include financial incentives, planning reform, construction innovation and public land use. Brokers tracking policy may find it useful for seeing where supply measures are headed.

CMHC cautions that countries define and collect housing data differently. The comparisons show broad trends, not precise rankings.