Rosenberg Research Says A Wall of New Supply Hits Canada's Cooling Housing Market

10:22 AM EST, 01/19/2026 (MT Newswires) -- After Thursday's weak Canadian existing home sales data, the country was on the receiving end of another real estate data the day after, with housing starts bouncing by 10.9% month over month to 282,400 units at an annual rate in December -- beating expectations of a 260,000 unit reading, said Rosenberg Research.

This was on top of a 10.5% month-over-month rebound in November, marking the fourth increase in the past six months. The 28,400 level is at the high end of the historical range -- dating back to 1990 -- and is 45% above the long-run norm of the past 35 years -- showing that the incoming supply pipeline is stepping up far more than current housing demand, stated Rosenberg.

This demand-supply picture points to lower prices -- now down 4.0% year over year according to the benchmark price index with no signs of stopping, Rosenberg pointed out.

As a reminder, Canada's existing home sales fell by 2.7% month over month in December and are now down 1.9% year over year for 2025 as a whole. This is a sharp contrast to the trend for housing starts, which rose by 5.6% year over year in 2025.

That was the largest yearly increase since 2021 -- a time when the Bank of Canada policy rate was sitting at just 0.25%, leading to a surge in residential construction activity, added Rosenberg.

All-in, waning home sales and an influx of housing supply on Canada's way will be a clear incentive for the BoC to maintain its accommodative policy stance, according to Rosenberg.

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