Mark Buckshon
Ontario Construction News staff writer
OTTAWA – After a disappointing 2025 that saw new home sales dip well below historical averages, Ottawa’s housing industry is entering 2026 with a mix of caution and resolve.
Speakers at the Greater Ottawa Home Builders’ Association (GOHBA) “Hello 2026, Goodbye 2025” event painted a picture of a market with strong fundamental drivers—such as population growth and stability—currently held back by a psychological wall of consumer uncertainty.
Held in early February, the annual forecast event featured insights from Cheryl Rice of PMA Brethour Realty Group, David Coletto of Abacus Data, and Francis Cortellino of the Canada Mortgage and Housing Corporation (CMHC).
Cheryl Rice, president of PMA Brethour, reported that 2025 was a “disappointment” for many who had hoped for a turnaround. The year ended with 3,426 new home sales, roughly 23 per cent below the 10-year average.
“Confidence remained the key constraint,” Rice told the audience. “While affordability improved, confidence never really caught up.”
The sluggishness has spilled over into the new year. Rice revealed that January 2026 saw only 246 new home sales—a 29 per cent decrease from the previous January and the lowest January total in over a decade, excluding 2023. She attributed the slow start to a combination of harsh winter weather and lingering economic anxiety.
However, Rice forecasted a stabilization for the year ahead, projecting approximately 3,500 new home sales for 2026, with an upside of 3,800 if builder releases accelerate.
The year “2026 will reward disciplined builders who continue to align supply, pricing, and product with real absorption,” Rice said. She noted that inventory has surpassed 3,000 homes for the first time since 2019, creating a balanced market where buyers have more choice and leverage.
David Coletto, CEO of Abacus Data, explained the psychological headwinds facing the market. He argued that consumers have shifted from a “scarcity mindset” (fear of not having enough) to a “precarity mindset”—a paralyzing fear of unpredictability.
Coletto cited the re-election of Donald Trump and the resulting tariff threats, along with fears of AI job displacement, as key drivers of this anxiety.
“The fundamental unmet need of the consumer in this city right now is reassurance,” Coletto said. “They need to know it’s going to be okay.”
His data showed that 70 per cent of Canadians are delaying major life decisions, such as buying a home, due to financial uncertainty. Interestingly, Coletto noted a paradox where consumers are pulling back on major investments like housing while continuing to spend on “retail therapy” and dining out as a coping mechanism.
He advised builders to focus on reducing risk for buyers. “If you can give people agency… that’s a power no one else can take away,” he said, suggesting that marketing strategies must pivot to offer stability and certainty in an unpredictable world.
Rental market: The “Field of Dreams” era ends
A significant shift is also underway in Ottawa’s rental market. Francis Cortellino, Senior Specialist at CMHC, warned that the days of “if you build it, they will come” are over.
After years of record-low vacancy rates driven by high international migration, the market is facing a supply surge just as demand begins to cool. Cortellino noted that international migration to Ontario has dropped significantly, yet Ottawa has a record 11,000 rental units currently under construction.
“We expect the vacancy rate to continue to increase in 2026,” Cortellino said.
He highlighted that new purpose-built rental units are commanding high rents—often between $3.50 and $4.00 per square foot—which may be difficult to absorb given the softening demand. Vacancy rates for newly built apartments have already risen to around 8.5 per cent in some segments as tenants face affordability ceilings.
“Developers told us that last year they were [seeing] low rent growth in the newly built segment because there’s a lot of competition out there,” Cortellino noted. He advised that landlords will need to put significantly more effort into marketing and incentives to attract and retain tenants in 2026.
Despite the short-term challenges, the event closed on a note of long-term optimism. Updated growth projections for the City of Ottawa suggest the population could reach 680,000 by 2051, requiring the construction of up to 250,000 new homes over the next 25 years.
“Our fundamentals are strong,” Rice concluded. “Success in 2026 comes down to… affordability, pricing discipline, clarity, and execution.”
