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.
Implications for Real Estate and Mortgages
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.
