Moderating building activity refocuses opportunities for Canada’s mortgage lenders and brokers
Canada’s construction sector is expected to inch forward rather than surge, a shift with big implications for lenders watching housing supply, project pipelines and credit risk.
A new forecast from ResearchAndMarkets projected that Canadian construction output would grow 2.2% in real terms in 2025, before averaging about 2.6% annually from 2026 to 2029 as government spending on transit, renewables and housing ramp up.
The report linked near‑term growth to stronger investment in both residential and non‑residential projects, reflected in a 2.8% year‑on‑year increase in the value of building permits and a 4.9% rise in building construction investment in the first half of 2025, based on Statistics Canada figures.
It also warned that United States–Canada trade tensions and tariff uncertainty could weigh on construction in 2025, before a more durable recovery set in.
Despite the political turbulence, mortgage professionals report that Canadian buyers are taking the uncertainty in stride. Micky Khaneka, broker with DLC Clear Trust Mortgages, observed that after months of back-and-forth headlines, most clients have grown accustomed to the noise and are no longer hesitating because of it.
“It is something that I’m assuming people watch, but it’s not something that has the topmost importance to people,” Khaneka told Canadian Mortgage Professional.
In its 2025 Housing Market Outlook, Canada Mortgage and Housing Corporation said housing sales and prices were expected to rebound as “lower mortgage rates and changes to mortgage rules unlock pent‑up demand in the short term.”
CMHC added that prices would “grow faster in 2025” before moderating, while total housing starts were likely to remain above their 10‑year average even as condominium construction slowed.
Government policy stands behind much of the construction pipeline. Ottawa’s new Canada Public Transit Fund, announced in 2024, is set to provide an average of $3 billion per year for public transit and active transportation infrastructure starting in 2026–27, building on more than $30 billion already committed to over 2,000 transit projects.
That program is expected to support non‑residential construction demand and, in turn, localized housing needs around new transit corridors.
For brokers and lenders, growth is still possible, but winning deals mean knowing which markets are truly building – and where projects and borrowers are at risk of stalling.
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