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The Canadian Home Builders' Association’s (CHBA) index for measuring industry sentiment plummeted to new lows in Q4 2025, as the industry group continued to sound the alarm on the future of new home construction.
The CHBA’s Housing Market Index for single-family homes hit 19.6 points out of 100, the first time it has fallen below 20. For multifamily housing, the score was 14.7, a second consecutive record low.
Compared to a year ago, the score for single-family homes fell by 5.5 points and by 7.3 points for multifamily housing.
A driving force behind the new lows for the index was the homebuilding industry in Canada's Prairie provinces. The single-family and multifamily scores in the region fell by double digits from last year, dropping to 32.8 and 40.7, respectively.
Sentiment among homebuilders in Ontario and British Columbia continued to stay “extremely low.” The single-family score in British Columbia, for example, was a record low of 7.5. The multifamily score in Ontario was as “negative as it realistically can get” at 2.5.
The Ottawa-based industry association said the dour findings “point to a multi-year dearth in new housing starts for freehold or condominium ownership if drastic changes are not made.” Additionally, builders can no longer avoid layoffs or replace departing or retiring workers, hurting homebuilding capacity.
Almost four-in-10 homebuilders said they or their subcontractors made layoffs in Q4, similar to the prior quarter. Half of the homebuilders surveyed said they were “concerned” or “extremely concerned” for their business in 2026. The number of those extremely concerned increased from the previous quarter.
The CHBA index draws upon a panel of homebuilders and developers from provincial home builders’ associations across Canada. It considers factors such as current selling conditions, expectations for selling conditions over the next six months, and the level of sales office traffic to forecast the number of housing starts that can be expected in six months and beyond.
CHBA urges tax relief for first-time homebuyers
The latest index scores are the latest indication of broad and growing negativity in Canada’s homebuilding sector.
While nationwide housing starts in 2025 increased by 5.6 per cent from 2024, according to the Canada Mortgage and Housing Corporation, the six-month trend for starts was flat in December.
Canadian homebuilders have raised concerns about the price inflation of construction materials, the impact of tariffs on the sector, and a shortage of construction workers.
The CHBA said the most impactful policy the federal government could implement to improve new home sales would be expanding the enhanced GST rebate on homes under $1.5 million to all buyers. It could help reverse the trend of falling housing starts for ownership and “help buoy the provincial income tax revenue that is being lost,” the association said.
The enhanced GST/HST rebate for first-time homebuyers has still not been put into law, despite being announced in March 2025. This has also put a damper on sales and on the index scores, the CHBA said, as first-time buyers are waiting on the sidelines.
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