Canada's home prices more than doubled since 2005, outpacing all peer nations
A new CMHC report shows Canada's inflation-adjusted home prices rose 101% over two decades, more than any comparable country.
OTTAWA — Canada's inflation-adjusted home prices more than doubled between 2005 and 2025, rising 101% and outpacing every major peer country, according to new international research by Canada Mortgage and Housing Corporation.
The findings, part of CMHC's new International Series, draw on the Federal Reserve Bank of Dallas's international house price database to place Canada's trajectory alongside 18 peer nations.
They point to a persistent structural gap between housing demand and supply, not short-term rate movements, as the primary driver of Canada's sustained divergence.
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"Canada's housing challenge isn't just that home prices rose," said Aled ab Iorwerth, Deputy Chief Economist at CMHC.
"It's that demand grew faster than supply for longer than in many comparable countries. Understanding why that happened can help identify the changes needed to improve affordability."
Australia, which shares Canada's open-economy policy framework and experienced comparable population growth, saw real prices rise 79% over the same two decades.
The United States posted 30% growth, Germany 21%, and France 9%. The United Kingdom, which endured a significant correction during the global financial crisis before recovering steadily, registered just 13%.
Canada's housing stock per capita compounds the pricing pressure. The country has just 426 dwellings per 1,000 inhabitants, below the OECD average of 468 and well behind France (591), Finland (574), and Germany (518).
Countries such as Norway and Sweden, which also absorbed strong population growth over the period, entered that demand cycle with proportionately larger housing buffers.
Canada's population grew 29% between 2005 and 2025, a pace comparable to Ireland and New Zealand, yet real prices climbed far more steeply.
Annual completions accounted for only 1.2% of existing stock in 2011 and 1.3% by 2022, per OECD Affordable Housing Database data cited by CMHC, compared with Australia's consistent rate of approximately 1.7%.
In 11 of 17 comparator countries, completions grew as a share of existing stock by a larger margin than in Canada over the same period.
The imbalance became most acute after 2021. By 2023 and 2024, Canada was adding nearly five new residents per housing completion, a ratio that significantly exceeded Australia and Sweden at their respective peaks.
Ab Iorwerth cautioned in September that "although slower population growth has brought some improvements in affordability, new construction is slowing faster than demand."
He said the "key risk now is Canada underbuilds during this softer market and finds itself further short of housing when demand strengthens again."
A forthcoming CMHC international review will examine how peer countries scaled construction, through financial incentives, planning reform, and innovative building methods, and identify which strategies could apply to Canada.
Total housing starts remain well below what is needed to restore pre-pandemic affordability levels, even as rental construction carries much of the supply load. Your Space Hamilton reported in October that the national benchmark home price fell 0.4% in September and was 3.4% below a year earlier.
With files from Mortgage Professional America