Authored by: Grant Cameron, Senior Director of Public Affairs, RESCON
Canada’s housing market may finally be moving in the right direction, but industry leaders, economists, policymakers and housing experts agree the country remains a long way from solving its affordability and supply crisis.
That was the overarching message from speakers at Housing Summit 6.0, hosted by the Residential Construction Council of Ontario (RESCON) on September 23, where presenters examined market conditions, policy reforms and the long-term outlook for housing in Canada.
While government measures are beginning to show results and affordability has improved in key markets, speakers repeatedly emphasized that the progress made so far is not enough to close the nation’s substantial housing supply gap.
“We’re going in the right direction, but we’ve got to do more,” said Ian Lee, associate professor at Carleton University’s Sprott School of Business.
Lee offered what he described as a “qualified yes and a qualified no” to the question of whether housing reform in Canada is working.
“Good stuff has happened,” he told attendees. “It is sort of working.”
However, he noted that despite policy changes introduced by governments at all levels, housing construction continues to lag well behind demand. Canada currently builds roughly 250,000 homes annually, while CMHC estimates between 400,000 and 470,000 new homes are needed each year to restore affordability and eliminate the accumulated supply shortfall.
“The numbers clearly show that we are not building enough,” Lee said. “It is crystal clear that we are still falling behind.”
The challenge is especially significant because population growth over the past decade has vastly outpaced housing production, creating a deficit that cannot be erased quickly even if construction activity accelerates.
Despite those concerns, the summit highlighted several signs that the housing market is beginning to stabilize.
Jason Mercer, chief market analyst at the Toronto Regional Real Estate Board (TRREB), told attendees that affordability conditions have improved substantially over the past two years.
One key measure illustrates the shift: the income required to purchase a $1-million home in the Greater Toronto Area has fallen from well above $200,000 annually during the peak of the interest-rate tightening cycle to roughly $140,000 to $150,000 today.
“Affordability is no longer the major obstacle it was during the peak of the interest-rate tightening cycle,” Mercer said.
Lower borrowing costs, softer home prices and improving financing conditions would normally trigger a significant rebound in sales activity, he said. Yet many buyers remain cautious because of continued uncertainty surrounding inflation, economic growth and interest rates.
Sales levels remain in the 60,000 to 70,000 range annually, well below what demographic trends would typically support. Mercer suggested a substantial amount of pent-up demand continues to build and could be unleashed once consumer confidence improves.
The outlook is less uniform across the country, according to Daniel Foch of Valery Real Estate Inc., who highlighted growing differences between housing markets in Ontario and British Columbia and those in other regions.
“The markets that continue to grow and continue to attract new residents are the ones that remain affordable,” Foch said.
He pointed to cities, such as Calgary and Halifax, that continue to attract younger Canadians seeking home ownership opportunities increasingly out of reach in Toronto and Vancouver.
In many Canadian markets, average home prices remain within the traditional lending benchmark of four to five times household income. In contrast, Toronto and Vancouver remain near double-digit price-to-income ratios.
Foch said affordability remains the defining issue shaping migration patterns, investment decisions and future market performance across the country.
Ontario Minister of Municipal Affairs and Housing Rob Flack outlined several steps the Ontario government has taken to improve housing conditions and increase construction activity.
“Government has to create the conditions so builders can do what they do best, and that’s build homes,” Flack said.
The province has introduced a series of legislative reforms aimed at accelerating development approvals and reducing barriers to construction, he said. Measures include deferring development charge payments until occupancy, streamlining site-plan requirements, updating building code provisions and implementing broader planning reforms.
Flack also pointed to the province’s partnership with the federal government to temporarily eliminate the HST on qualifying new homes, a measure long sought by the residential construction industry.
While some observers questioned whether the rebate would generate meaningful demand, Flack said early results suggest it is already having a significant impact.
According to data presented at the summit, new single-family home sales in the GTA tripled in July and August compared with a year earlier. Province-wide, new home sales increased approximately 130% year-over-year during the second quarter of 2026.
“We can prove that it’s working,” said Flack.
Political pressure surrounding housing remains intense in spite of the gains.
David Coletto, founder and CEO of Abacus Data, presented survey results showing that 79% of Canadians believe the country’s housing system is not functioning properly and nearly three-quarters say insufficient housing is being built to meet demand.
Only about one in five Canadians expressed satisfaction with the performance of federal, provincial or municipal governments on housing issues. In Ontario, just 16% of respondents believed the provincial government was moving in the right direction on affordability and housing availability.
Coletto said the findings suggest housing will remain a dominant political issue as municipalities and provinces head into election cycles over the coming years.
