Ottawa, ON — Outlook on the new home construction sector looks bleak. According to a recent Canadian Home Builders’ Association (CHBA) housing market index (HMI), Ontario and British Columbia are likely to be unhappy with current forecast projections.
The CHBA’s single-family HMI was 26.4 for the first quarter (Q1) of 2025, down 8.5 points from the previous year and close to the index’s record low of 24.6 in Q4 of 2023. The multi-family HMI score was 22.3, almost the same as the record low score of 22 from Q4 in 2024, according to the index. The HMI is based on a scale of zero to 100.
The CHBA expected these low scores due to the Canada Mortgage and Housing Corporation’s (CMHC) housing starts data, which shows that starts in areas with at least 10,000 population in the first quarter of 2025 fell nine per cent year over year nationally to 45,302 units.
In addition, the CHBA’s index highlights that the low scores in both sectors were due to builders’ expectations for future sales conditions this quarter. Over the past two years, builders’ expectations tended to be higher than the measure of current sales sentiment.
However, the index reports that over 50 per cent of both single—and multi-family builders rated their expectations for future sales as “poor”—this is the first quarter this has happened.
Specifically, in Ontario, both single and multi-family scores, 7.4 and 2.9, respectively, were at record lows. In British Columbia, the single and multi-family scores were 17.2 and 24.8.
As suspected, the ongoing trade war has impacted residential construction through both higher material prices and lower consumer demand. The index highlights that 71 per cent of builders said they had already received supplier notification of price increases. At the same time, 75 per cent of builders estimated that American-made materials constitute less than 30 per cent of the total value of building materials per unit built.
The index also reports that the current total cost of construction is already above what many consumers can handle and that longstanding tariffs on a wide range of U.S. building material imports would be a massive setback to achieving housing affordability targets.
The CHBA HMI comes from a panel of homebuilders and developers from across the country, based off of assessments on current selling conditions, expectations for selling conditions over the next six months, and the level of sales office traffic. The HMI scale is based on a model created by the National Association of Home Builders’ American version.