What to know
- Canadian housing prices more than doubled between 2005 and 2025, according to a study by the Canada Mortgage and Housing Corporation (CMHC).
- Canada’s International Real House Price Index rose from 100 in 2005 to 201.02 in 2025, after peaking at 243.59 in 2022.
- Other countries saw smaller increases over the same period, including Australia at 79 per cent and Sweden at 64.16 per cent. The U.S. recorded a 30.34 per cent increase.
- Zown CEO Rishard Rameez pointed to a mismatch between population growth and housing construction, building barriers and fluctuating interest rates as factors contributing to Canada’s affordability challenges.
- Although home prices have declined in recent years, rising living costs and wages that have not kept pace have continued to make homeownership difficult for many Canadians.
A new study is revealing that Canada’s housing prices have been rising faster than in other developed countries.
The report by Canada Mortgage and Housing Corporation (CMHC) has revealed that the country’s average housing prices have more than doubled since 2005.
According to the corporation, housing affordability issues began to emerge in the early 2000s first in Vancouver, followed by Toronto in the 2010s. Other major cities like Ottawa, Montreal, and Halifax have since followed suit.
Although housing prices in the country might at first appear to be following a global trend of increases, CMHC says Canada appears to be outpacing some of its peers, and is among the countries with the longest housing market growths in the world.
Canada’s housing market compared to other countries
The study suggests Canada, along with Australia and Sweden, had a modest decline in housing prices during the 2008 global recession, and has seen a consistent increase in prices until 2022.
Meanwhile the United States and the United Kingdom saw several price corrections during the recession, but their markets have been recovering since 2012, with prices now close to what they were before the crisis.
France and Germany saw a consistent but moderate growth in prices in the same period, while Italy and Japan were among the few countries that saw little or no price increases, which the study suggests could be linked to their aging or shrinking populations.
Canada’s housing prices appear to have been increasing faster than in most other countries. According to the study, its prices have grown from a International Real House Price Index (RHPI) of 100 in 2005 to 201.02 in 2025 (meaning it saw a 101.2 per cent increase in that period), having reached a 243.59 RHPI peak in 2022.
In the same period, Sweden went from a 100 RHPI to 164.16 in 2025 and a 203.90 peak in 2021 and Australia went from 100 to 179.03, with a 177.97 peak in 2022.
The U.S. saw a 30.34 per cent increase in that same period, with prices having reached their peak in 2025.
France saw a 8.5 per cent increase in the same period, reaching a 24.8 per cent peak in 2022, with prices dropping again after that.
The only two on the list to see a decrease in prices were Japan and Italy, which saw a drop of 7.5 per cent and 24.95 per cent, respectively.
Why have prices increased so much in Canada?
Although regular inflation could explain why prices have increased globally, it doesn’t explain why Canada has been outpacing other developed countries in increases, according to Rishard Rameez, CEO of homebuying platform Zown.
Instead, the numbers could be a reflection of a series of structural issues in the country, including policies that promote population growth while failing to tackle housing starts and construction barriers.
“This is a combination of a few things, including immigration policies that are not necessarily aligned with housing policies. And when the two don’t talk to each other, then we have issues,” Rameez said.
“If you look at the housing policies related to new buildings versus the immigration policies, when they don’t align, then we have a lot more people coming into the country, but we are not building homes as fast as we should be.”
In addition to a lack of connection between housing policies and population growth policies, the expert pointed to other issues like fluctuating interest rates that also make it harder for buyers to afford homes.
What does this mean for buyers?
While home ownership continues to be a desire for many Canadian families, growing housing prices and rising cost of living have made it significantly harder for many to afford buying a home in the country.
“For a lot of Canadians, I think the test for a healthy housing market is whether someone with a stable job and sensible saving plan has a true realistic pathway to a home,” Rameez said. “I would fully focus on making homes easier to deliver and reducing the financial barriers faced by some homebuyers.”
However, when that doesn’t happen, Rameez said it’s possible that Canadians will begin chasing home ownership opportunities elsewhere.
In fact, as pointed out by the expert, 120,640 Canadian citizens and permanent residents have emigrated from the country in 2025 according to Statistics Canada.
While reasons for leaving the country might vary significantly from person to person, Rameez said it’s possible that home ownership could have weighed in on some of these decisions. For a lot of potential buyers, purchasing in another country could mean not only paying less, but also affording something larger.
“If I have a good enough income, and I can potentially put down a down payment and purchase a home in the GTA, maybe I can afford a townhome for the price of maybe around $800,000 to $1 million. Now, for the same dollar amount I could possibly be buying a fully detached home with a big backyard in a different country, even south of the border,” he said.
Will it change anytime soon?
Over the past few years, prices have already been coming down across Canada, with the country having recently registered one of the lowest market activities in the last 10 years.
But that doesn’t mean buying a home has gotten any easier for most people.
While homes are technically a bit cheaper, the cost of living has been significantly rising, while average salaries have not been keeping up. According to Rameez, under these conditions, housing affordability has actually not improved much.
“House prices coming down doesn’t necessarily mean that people’s ability to afford a home has significantly improved because if the living cost, the rent, the gas that you pay at the pump, are things where you spend on a daily basis, are also increasing, that is not really changing [much],” he said.
In order for things to truly change and Canada’s prices to become more aligned with global trends, Rameez said the three levels of government would need to work towards policies that could decrease the gap between residents’ ability to buy and average prices, as well as matching population growth initiatives, like immigration, to faster construction.
“I think a lot of people blame immigration as one of the biggest setbacks, but at the end of the day, Canada needs to increase its population. But population growth definitely adds housing demand, so housing and population planning need to work together if we are to bring people in,” he added.
