Canada’s real estate industry is facing renewed turbulence as population growth stalls and foreign investment dries up, leaving developers in Vancouver scrambling for solutions. For the first time since 1951, both British Columbia and Ontario saw quarterly population declines, with B.C. losing 2,357 residents and Ontario down 5,644 in the first quarter of 2025. While modest in absolute terms, Statistics Canada says these are the largest drops on record, marking what some experts call a “population standstill.”
The development community, heavily reliant on steady population growth and foreign capital, is already feeling the pinch. Anne McMullin, president of the Urban Development Institute, warned that the core housing development model is breaking down. “Canada’s multi-family development model depends on pre-selling 60 to 70 percent of units to secure construction financing,” she explained. “With the departure of both foreign buyers and domestic investors, this model is faltering and choking off the supply pipeline.”
The slowdown follows years of rapid immigration that fueled housing demand and price escalation. Between 2021 and 2023, British Columbia added over 160,000 people annually, most through immigration. That influx contributed significantly to soaring home prices, according to recent Statistics Canada studies. One report linked immigration to a 21 percent increase in median home values across Canada’s major cities, while another found immigrants occupy more owned housing units per capita than Canadian-born residents.
With migration rates cooling and Ottawa pledging to reduce temporary residents from 7.1 percent of the population to 5 percent, developers say government policies must shift to avoid a full-scale market freeze. McMullin has called on Housing Minister Gregor Robertson to ease the federal foreign buyer ban, particularly for newly built homes with rental covenants or affordable housing guarantees. She also proposed allowing foreign investors to live in the homes they purchase.
Conservative Leader Pierre Poilievre, meanwhile, has taken a sharply different stance, advocating for negative population growth to allow infrastructure and housing supply to catch up. He argues that continued high immigration without adequate planning puts pressure on social services and housing, creating false hope for newcomers and unaffordable conditions for residents.
Despite growing political pressure, the federal government’s position remains ambiguous. Prime Minister Mark Carney has stated that immigration will be brought to “sustainable levels” but has not outlined concrete policy changes. With developers urging action and public sentiment shifting, Ottawa faces mounting pressure to either open the door slightly to foreign capital or double down on limiting demand in pursuit of long-term affordability.
