Carpenters build a log home made from white pine in Salaberry-de-Valleyfield, Que., in October, 2025.Christinne Muschi/The Canadian Press
Canada has now had three straight years of stalled home prices. According to the latest data from the Canadian Real Estate Association, national home values are down by about 1 per cent from last year and 4 per cent from their 2022 peak. Adjusted for inflation, average prices today are roughly where they were in 2020, when the pandemic began.
That is progress, but not nearly enough. Home prices had already surged out of control well before COVID, especially in British Columbia and Ontario. Returning to 2020 levels in those provinces means returning to home prices that were already out of reach for most young adults. Meanwhile, prices in other provinces continue to climb.
So it will be essential for the Carney government to renew and substantially improve Canada’s National Housing Strategy. Launched in 2017 as a 10-year plan, the Parliamentary Budget Officer shows federal housing spending will drop fall by 56 per cent after 2027 if it is not renewed.
Those cuts run directly counter to the Prime Minister’s rhetoric about generational investments in housing. They also expose the gap between promises and plausible outcomes. Mr. Carney has spoken about doubling the pace of home building, yet the PBO shows that measures in his first budget will increase supply by roughly 2 per cent – not 100.
What might a condo market recovery look like?
Renewing the National Housing Strategy offers a chance to do better. The original version was a step forward, but it avoided several hard truths that can no longer be ignored.
First, housing policy must acknowledge an uncomfortable intergenerational reality. The dramatic rise in home prices over the past quarter century enriched those who already owned property – mostly boomers and Gen X – by shifting costs onto those who followed. Millennials and Gen Z now pay the price through rents and mortgages that consume far more of their incomes than earlier generations faced. Their housing insecurity finances the housing wealth gained by older generations.
The initial NHS never confronted this tension. NHS 2.0 must. It needs to grapple openly with the fact that the goals of younger people – lower rents and attainable homeownership – conflict with the desire of many existing owners to maintain, if not increase, their housing wealth.
We won’t fix housing affordability without an honest conversation about what this tension implies for home prices: do we want them to rise, stall, or fall? The next NHS must minimally judge that prices should stop climbing. Otherwise, new entrants to the housing market will remain trapped by unaffordable prices. Reasonable people can disagree about how far prices should fall, or whether long-term stalling is enough. But that debate belongs in public view.
Second, the next housing strategy must repair a broken feedback loop between housing inflation and monetary policy. Ultralow interest rates helped fuel the surge in home prices during the pandemic, while rapid rate hikes later helped stall them. Yet throughout this cycle, Canada’s official measure of inflation – the Consumer Price Index – played down housing inflation by tracking homeowners’ continuing expenses rather than the skyrocketing cost of buying a home. The result was cheaper credit for longer, pushing prices higher and deepening insecurity for those trying to enter the market.
Statistics Canada already has a solution, as I have argued before: a tested “acquisition approach” that measures housing inflation the way younger Canadians experience it – through the full cost of purchasing a home, including land. Adopting it would help ensure monetary policy doesn’t fuel the very housing inflation it is meant to control.
Finally, it is time to ask more from those who have gained the most. Many older homeowners, including me, benefited enormously from the lottery of rising home prices. While some try to offset that advantage privately, by helping their children buy homes, that is not a policy solution.
A public response would add a modest surtax on higher-value homes, or ask financially secure older Canadians to receive smaller retirement benefits like Old Age Security so savings can be repurposed, in part, to address housing insecurity for younger generations.
Ottawa currently plans for OAS to expand by tens of billions to meet the needs of an aging population. Yet federal support for housing is scheduled to shrink sharply after 2027. Governments are prepared to borrow to protect older Canadians’ wallets, but reluctant to invest at scale in the foundations younger Canadians need to build stable lives.
If National Housing Strategy 2.0 does not confront that funding imbalance directly, the housing crisis will easily outlive the strategy meant to solve it.
Dr. Paul Kershaw is a policy professor at UBC and founder of Generation Squeeze, Canada’s leading voice for generational fairness. You can follow Gen Squeeze on X, Facebook, Bluesky, and Instagram, as well as subscribe to Paul’s Hard Truths podcast.
