Saturday, September 13, 2025

Latest

Canadian Homebuilders Face Headwinds: Interest Rates, Labor Gaps, and the Urgent Need for More Homes

In a critical period when Canada needs to ramp up its housing production, the construction industry appears subdued.

According to the Canadian Home Builders’ Association (CHBA), 22% of Canadian homebuilders canceled projects entirely in Q2 2023 due to daunting high interest rates, and even though there was a slight rise in the construction of both single- and multi-family homes in the same quarter, the levels are still historically low.

A significant 67% of industry experts confirmed the ongoing real estate market slowdown has led to the production of fewer housing units. CHBA CEO Kevin Lee emphasized the urgency, noting that Canada must construct 5.8 million homes over the next decade to bridge the existing housing supply gap.

The challenges hindering the goal? Rising construction costs, labour shortages, and restrictive financing conditions. Interestingly, this building lag occurs just as Premier Doug Ford plans to repurpose 7,400 acres of the Greenbelt for housing needs, aiming for a new housing target in the Greater Hamilton and Toronto Area.

There was a brief moment of hope for potential buyers when the Bank of Canada paused its rate hikes, resulting in an uptick in sales; however, subsequent rate hikes in June and July might continue to stifle building enthusiasm. While CHBA’s housing market index reflects slightly better conditions for new housing construction, it’s still a far cry from its optimistic levels in Q1 2022.

The pandemic had previously spurred housing starts, with 2021 and 2022 seeing numbers above the historic average of 200,000. But with the current building slump the real challenge is motivating builders to initiate construction. The looming labour shortage in the construction sector further complicates matters, with an expected 20% of the workforce retiring soon. And while Canada has eased some immigration rules to fill this gap, it’s just a drop in the bucket.

Information for this story was found via the Canadian Homebuilders’ Association and the sources mentioned. The author has no securities or affiliations related to the organizations discussed. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.

Video Articles

Avino Q2 Earnings: Steady As She Goes

MEG Energy: Cenovus Comes In With $7.9 BILLION Offer

Orla Mining Q2 Earnings: Musselwhite Changes Everything

Recommended

Northern Superior Expands Philibert With 350 Metre Step Out Testing 1.10 g/t Gold Over 25.5 Metres

Goliath Resources Hits 18.58 g/t Gold Over 5.00 Metres At Surebet

Related News

Investor Influence in Canadian Housing Market Surges to 30% in 2023

Investors are increasingly shaping Canada’s housing market, with their influence growing steadily, according to recent...

Wednesday, September 20, 2023, 12:30:00 PM

OSFI Urges Action On Canadian Mortgage Extensions Before It Becomes “Unmanageable”

Canada’s financial regulator has sounded the alarm on the mounting risks associated with mortgage extensions,...

Wednesday, June 14, 2023, 03:46:00 PM

Office Vacancy Rates in Canada Reach 30-Year High

According to a groundbreaking report by renowned commercial real estate firm CBRE, Canada is experiencing...

Wednesday, July 5, 2023, 11:19:00 AM

Building Permit Values Rise 10.5% in May

The value of building permits rose 10.5% to $10.5 billion in May, largely due to...

Monday, July 10, 2023, 02:56:00 PM

Justin Trudeau Drops GST From New Rental Builds

In an upcoming announcement, Prime Minister Justin Trudeau is set to declare the removal of...

Thursday, September 14, 2023, 01:26:15 PM