Sales and construction of new homes got off to a good start last month, but the outlook for 2025 has been clouded by growing economic uncertainty.
According to the Greater Ottawa Home Builders’ Association, new home sales were up nearly 25 per cent in January from December 2024, with 304 new homes sold compared to 244 in December.
The market has strengthened since January 2024, the report said, with a 13 per cent increase in sales of new homes.
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“This is a promising start to the year after strong year-over-year sales in 2024,” said Jason Burggraaf, executive director of the association. “It’s great to see the continued growth of buyers getting back into the market, even in the face of tariffs and economic uncertainty. Let’s hope this momentum is sustainable.”
The 304 new homes sold in January is an increase from January 2024 and from January 2023, but a decrease from the 522 new homes sold in January 2022.
The Ottawa-Gatineau region also saw an uptick in housing starts to start off 2025, according to the Canada Mortgage and Housing Corp.
In its most recent report, CMHC found that the region’s seasonally adjusted annual rate of housing starts increased four per cent in January to 10,578, compared with 10,167 in December. While the rate of single-detached starts last month decreased 12 per cent compared with December, the rate of multi-unit urban starts rose 10 per cent.
Housing starts rose 97 per cent last month from a year earlier, with builders in the National Capital Region recording 788 starts, compared with 401 in January 2024. An 11 per cent increase was recorded in single-detached homes from the year-ago period, while there was a 122 per cent increase in multi-unit starts.
Burggraff told OBJ earlier this month that uncertainty around the trade relationship with the U.S. could derail the market going forward.
“The overriding concern that I have is what the impact on consumer confidence will be, especially in the Ottawa market,” he said at the time. “We’ve had a couple slower years of activity, but we’ve had some good signs. My concern is that all that momentum will be halted by concern about what tariffs might do to the economy.”
Nationally, CMHC said the annual pace of housing starts in January rose three per cent compared with December, helped by strength in multi-unit starts in Quebec and B.C.
The national housing agency said the seasonally adjusted annual rate of housing starts was 239,739 units in January, up from 232,492 in December.
“While these increases show early signs of progress to begin the year, foreign trade risks add significant uncertainty for housing construction going forward,” said CMHC deputy chief economist Tania Bourassa-Ochoa in a statement.
CMHC’s most recent housing market outlook report projected a rebound in home sales and prices this year as homebuyers take advantage of improved borrowing conditions. It forecasted starts to slow from 2025 to 2027, mainly because of fewer condominiums being built, as investor interest lags and demand from young families wanes.
The agency said its outlook was clouded by the threat of widespread tariffs from the U.S. A trade war between Canada and the U.S., combined with factors such as reduced immigration targets, would likely slow the economy and limit housing activity, even as some households see improved buying power in the short-term, it said.
The agency’s 2025 market outlook report said in a scenario where high tariffs were imposed, it would temporarily raise inflation, while prompting the Bank of Canada to lower its key policy rate to support the economy. In that scenario, it predicted a recession would prolong Canada’s housing recovery, leading to more homebuyers delaying purchases and fewer homes being built.
With files from The Canadian Press
