(905) 441 0770 allen@allenehlert.com

Canada Continues to Misjudge Population Growth

by | April 15, 2025

Canada is growing—faster than most experts predicted, and certainly faster than many housing policymakers have planned for. As a professional mortgage agent, I’ve seen firsthand how rapid demographic changes can ripple through local housing markets, pushing demand up and stretching affordability to its limits. Recent insights from CIBC World Markets reveal that Canada’s population growth has been consistently underestimated, a mistake that carries serious implications for real estate markets and the mortgage industry. In this article, I’ll walk you through what’s driving this population surge, the dangers of poor forecasting, and how these factors are shaping the future of homeownership in Canada.

Highlights:

  • Canada’s Population Growth is Being Underestimated: CIBC projects 1.1% growth in 2025 and 1.0% in 2026, significantly higher than official estimates of 0.3% and -0.2%
  • Past Mistakes Are Being Repeated: Canada previously underestimated population growth, contributing to today’s housing affordability crisis.
  • Massive Housing Supply Gap: CMHC is underestimating housing demand by as much as 1.2 million homes.
  • Mortgage Market Impact: Mortgage professionals must prepare for higher loan amounts, evolving risk profiles, and shifting affordability metrics.

A Nation on the Rise

The Underestimated Surge

Repeating Past Mistakes

The Housing Supply Gap

Implications for Real Estate and Mortgages

Moving Forward

A Nation on the Rise

Canada’s population is growing at a pace that outstrips official projections, posing significant challenges for housing and infrastructure planning. CIBC World Markets warns that underestimating this growth could exacerbate existing issues in the housing market and strain public services.​

The Underestimated Surge

While Statistics Canada projects a modest 0.3% population growth in 2025 and a 0.2% decline in 2026, CIBC economists argue these figures are unrealistically low. They estimate actual growth rates of 1.1% in 2025 and 1% in 2026. This discrepancy stems from overestimating the departure of non-permanent residents and undercounting asylum seekers and others who remain in Canada beyond their visa expirations. ​

Repeating Past Mistakes

This isn’t the first time Canada has misjudged its population growth. A decade ago, similar underestimations led to inadequate housing development, contributing to today’s affordability crisis. CIBC’s report emphasizes that failing to account for all residents, including those awaiting visa renewals or permanent residency, results in suboptimal planning and exacerbates housing shortages.

The Housing Supply Gap

The Canada Mortgage and Housing Corporation (CMHC) has been criticized for underestimating housing needs. CIBC’s analysis suggests that CMHC’s forecasts fall short by approximately 1.2 million homes, primarily due to undercounting non-permanent residents who have a higher demand for housing. This gap is particularly pronounced in provinces like Ontario and British Columbia, where housing demand is highest. ​

Implications for Real Estate and Mortgages

The underestimation of population growth has direct consequences for the real estate market and mortgage industry:​

  • Increased Demand: A growing population intensifies competition for existing housing, driving up prices and making affordability a more pressing issue.​
  • Strained Infrastructure: Public services and infrastructure may become overwhelmed, affecting community livability and property values.​
  • Mortgage Pressure: Higher property prices can lead to larger mortgage loans, increasing financial strain on borrowers and potentially impacting default rates.​

Moving Forward

Accurate population forecasting is crucial for effective housing and infrastructure planning. Policymakers and industry stakeholders must consider the full scope of population growth, including non-permanent residents and asylum seekers, to address the housing crisis effectively. By doing so, Canada can better prepare for its demographic future and ensure sustainable development.

Summary

Canada’s population is expanding far more rapidly than official projections suggest, due in large part to underestimated numbers of non-permanent residents and asylum seekers. This growth has serious consequences: it exacerbates housing shortages, drives up property prices, and places greater pressure on mortgage affordability. Past underestimations have already led to inadequate housing supply, and unless planners adjust for current realities, we risk repeating those mistakes. The mortgage and real estate industries must recognize this shift and respond with smarter lending strategies, proactive development planning, and advocacy for data-driven policy reform. In short, understanding Canada’s true population trajectory is not optional—it’s essential for sustainable growth in housing and finance.

Mortgage and Money Radio Logo
Allen Ehlert

Allen Ehlert

Allen Ehlert is a licensed mortgage agent. He has four university degrees, including two Masters degrees, and specializes in real estate finance, development, and investing. Allen Ehlert has decades of independent consulting experience for companies and governments, including the Ontario Real Estate Association, Deloitte, City of Toronto, Enbridge, and the Ministry of Finance.

Canada's Mortgage Process

Canada’s Mortgage Process

Today getting a mortgage is a complex process involving the collection and submission of a large amount of documentation, 6 to 7 times more than previously. This can be daunting for a lot of borrowers. This is why it is critical to work with a mortgage agent to help you through the mortgage application process. It’s also why partnering with a mortgage agent is the very first thing you should do and the first step to getting home.

Using a Cash-back Realtor

Using a Cash-Back Realtor

In today’s real estate market, many Canadian homebuyers don’t know about the benefits of a cash-back realtor. Imagine getting a part of the agent’s commission for every property deal. This is what cash-back home buying offers, making homes more affordable in Canada.

Graduated Real Estate

Mortgage Term: Graduated Rate Estate

Discover the implications of graduated rate estate, how it allows an estate to benefit from graduated income tax rates and the management of an estate’s assets.

Mortgage Commitment

Mortgage Commitment: What You Must Know Before Waiving Financing

Discover what a mortgage commitment is and its importance in regards to waiving conditions on your offer to buy a home. Learn what you need to know before waiving financing.

Mortgage Discharge Statement

Mortgage Discharge Statement

Learn why the mortgage discharge statement is an important document that ensures transparency and accuracy when calculating the total payout for a mortgage transfer.

Gifts Ineligible for Net Worth Programs

Discover why gifts are not generally eligible to be used as part of the down payment or source of income for people applying for a mortgage under the Net Worth Program

Smart Second Mortgages

Smart Second Mortgages

Smart Second Mortgages: A smart second mortgage is more than a fallback, it’s an intelligent strategic tool.

Refinance Strategy

John and Mary Canuck: Refinancing Strategy

Learn how Canadians are leveraging home ownership to generate income, reduce taxes, and build wealth.

What is Your Best Rate?

What’s Your Best Rate?

Rate is important, but going for the lowest rate mortgage could cost you far, far more. Learn about the ‘hidden’ risks of low-rate mortgages and discover your best rate.

Mortgage Programs

There’s a Mortgage for Everyone

. The current reality for many Canadians is a complex financial profile, uncertain employment, and varied income streams, all of which make qualifying for a mortgage more challenging. However, the good news is that a wide variety of mortgage programs exist to cater to different borrower needs, making homeownership an attainable goal for many.