Canada’s population growth has slowed, but the national figure masks major regional disparities. Q1 2025 saw only 20,107 net new residents. However, population trends vary significantly by region; while some provinces continue to experience steady growth, others are facing declines, with impacts on housing demand, market dynamics, and economic conditions.
Alberta Accelerates, Atlantic and Prairie Provinces Even Out, While Other Regions Decline
Alberta remains a demographic outlier. Buoyed by interprovincial migration from costlier provinces like Ontario and BC, it posted 2.8% growth in early 2025, above the national average. In contrast, Atlantic Canada’s population, which had briefly benefited from a pandemic-era boom, has slowed overall. Population growth in the region dropped to near-zero just as a surge of new rental units is entering the market, setting the stage for a possible glut of supply.
Ontario, BC, and Quebec also saw population declines in Q1. Outmigration, affordability pressures, and a sharp reduction in non-permanent residents are contributing to this reversal. Meanwhile, Manitoba and Saskatchewan continue to grow modestly, though not fast enough to offset national softness.
Short-Term Oversupply vs. Long-Term Underbuilding
The housing market is now caught between two competing forces, according to an Edge Realty Analytics report. In the near term, a rise in rental construction is colliding with weakening demand. Nearly 100,000 rental units were started over the past year, with many being planned when population growth was surging. In several cities, the number of rental units under construction is more than 10% of the existing rental stock. However, with temporary resident numbers declining and broader demographic growth slowing, demand is no longer keeping pace. This is leading to conditions for vacancy rates to rise and rent growth to taper off.
At the same time, longer-term housing supply, especially in the ownership segment, is falling short of what will be needed in the years ahead. Condo starts dropped 43% year-over-year in Q1, and single-family home permits have dropped to levels last seen in the 1980s. In Ontario and BC, these figures are particularly stark, reflecting both market conditions and policy-driven bottlenecks. Toronto’s new condo sales, a key signal for future construction, have hit their lowest levels since the early pandemic. This suggests a sharp drop in completions by the end of the decade, potentially setting up a supply crunch just as underlying demand begins to recover.
Edge Realty Analytics notes that Canada may be overbuilding the type of housing needed least in the short term (rentals) while underbuilding the type of housing it will need most in the medium to long term (ownership units). If population growth stabilizes and immigration rebounds, this imbalance could lead to a rapid tightening in ownership markets, even as the rental side remains soft.
A Shifting Demographic
A key factor in this will be Canada’s demographic engine. Non-permanent resident numbers, which often support rental demand, have declined for two consecutive quarters following federal policy changes. At the same time, Canada’s natural population growth is lagging. In addition to direct real estate market impacts, lower demographic momentum will also likely affect consumer demand and labour force expansion.