CMHC data shows territorial construction costs running up to 1.5 times higher than in Calgary
Canada's northern housing markets edged toward recovery in 2025 even as structural barriers kept supply well below national norms, according to the Canada Mortgage and Housing Corporation (CMHC)'s 2026 Northern Housing Report (NHR).
The report examines conditions in the three territorial capitals — Whitehorse, Yellowknife and Iqaluit. It found that while affordability pressures have eased from their 2023 peak, investment in residential construction remained below 2021 levels, and per-capita housing starts continued to lag significantly behind the rest of Canada.
The national housing market will shrink in 2026 rather than grow, Canada Mortgage and Housing Corporation (CMHC) warned in its 2026 Housing Market Outlook Mid-Year Update, marking a significant pullback from the agency's February forecast.https://t.co/3hQo2DUhZ3
— Canadian Mortgage Professional Magazine (@CMPmagazine) July 23, 2026
Sales activity rebounded, but unevenly
Home sales in Whitehorse climbed 21% in 2025, supported by strong public-sector employment, low unemployment and lower borrowing costs following Bank of Canada rate cuts beginning in June 2024, CMHC said. The average home price rose 7.4% to a record high, driven primarily by single-detached homes.
Yellowknife posted a 7.4% rebound in sales and a 5.8% rise in average prices as new listings increased 10.1%.
Iqaluit told a different story. Land-title transfers fell to just 20 in 2025, nearly half the recent average, as working-age resident outflows and severe affordability constraints limited demand.
The average sales price edged up just 1.9%, with lower interest rates having limited effect as many households remained priced out of the market.
The dynamics mirror broader fragmentation in Canadian housing. Elan Weintraub, a Toronto-based mortgage broker at Mortgage Outlet, previously told Mortgage Professional America: "I think real estate is very cloudy and volatile. It's extremely micro-fragmented. Certain pockets might be lukewarm to hot."
CMHC 2026 Northern Housing Report
Home sales across Canada's territorial capitals, 2025
Whitehorse, YT
+21%
Sales (year-over-year)
Yellowknife, NT
+7.4%
Sales (year-over-year)
Iqaluit, NU
20
Land-title transfers* (↓ ~½ recent avg)
Whitehorse, YT
Yellowknife, NT
Iqaluit, NU
* Iqaluit operates under a leasehold land system. Ownership transactions are recorded as land-title transfers, not sales, and are not directly comparable to figures for Whitehorse or Yellowknife.
Source: Canada Mortgage and Housing Corporation (CMHC), 2026 Northern Housing Report
Construction costs are the defining constraint
Construction hard costs per square foot in Yellowknife have consistently run approximately 1.5 times those in Calgary since 2021; Whitehorse sits around 1.3 times higher, per CMHC data.
These premiums reflect a combination of short construction seasons, reliance on ice roads and water barges for material delivery, and limited local trades that force expensive reliance on transient workers from the south.
Social housing is filling much of the resulting gap. In 2025, it accounted for approximately 35% of new residential construction investment in Yukon, 36% in the Northwest Territories, and 93% in Nunavut — compared with roughly 6% nationally, according to CMHC.
That pattern is consistent with findings in CMHC's research on how municipal cost structures reshape housing supply across Canada.
Rental conditions remained exceptionally tight. In Whitehorse and Yellowknife, roughly 1 in 5 households could not afford private rental housing in 2025; in Iqaluit, that figure rose to nearly 1 in 2, CMHC found.
The NHR's Indigenous housing spotlight examined projects such as the Kivalliq Senior's Long-Term Care Facility in Rankin Inlet, Nunavut, which incorporates Arctic-adapted building orientation, passive heating and natural daylighting features.
Aled ab Iorwerth, Deputy Chief Economist at CMHC in Ottawa, said: "Addressing persistent barriers such as high construction costs, limited serviced land and labour shortages will be essential to improving housing outcomes in the North. At the same time, Indigenous-led and Indigenous-partnered approaches continue to demonstrate the importance of housing solutions that reflect local needs, cultures and Arctic conditions."
CMHC projects private-market supply to increase across all three capitals in 2026, but cautioned this growth will not be sufficient to close the per-capita starts gap with the rest of Canada.
Brokers tracking inventory conditions should monitor whether territorial projects translate into meaningful new stock before year-end, a question directly relevant to the national housing starts decline that continues to weigh on Canadian construction pipelines.
Make sure to get all the latest news to your inbox on Canada’s mortgage and housing markets by signing up for our free daily newsletter here.
