Canadian builder intentions are slipping even as policymakers throw tens of billions in stimulus at construction. Statistics Canada (StatCan) data shows building permit values fell sharply in February, with only residential intentions posting a modest gain that still translated into fewer homes planned. Meanwhile, non-residential permits fell abruptly, pointing to weaker investment appetite beyond the condo pipeline.
Canada Building Permits Post Sharp Drop In February
Source: StatCan.
Canadian building intentions cooled in February, with the seasonally adjusted value of permits falling 8.4% to $12.1 billion. That left total permits 8.6% lower than last year, driven primarily by a plunge in non-residential investment—though residential permit values only grew in the multi-family segment.
The nominal slowdown is worse in real terms. Total permit values fell 8.6% from January, 11.5% lower than last year. This marked the weakest February for building permit values since 2023, showing construction intentions remained soft well after higher rates ended the pre-construction frenzy.
Canadian Residential Permits: Higher Values, Fewer Homes
Source: StatCan.
Residential permit values rose 1.7% to $8.1 billion in February, but remained 2.8% lower than a year earlier. The gain came entirely from multi-family permits, where permit values climbed 3.4% from January. Tempering that growth were single-family permits, which slid 1.6% lower to just $2.7 billion.
A seasonally adjusted 24,889 units were authorized in February, down 0.8% from January and 4.6% lower than last year. Mo’ money, less housing. It’s a theme, really—even when sales are frozen.
Canada Sees Non-Residential Permits Plunge 24%
Non-residential construction intentions snapped lower in February, rolling back much of January’s strength. Permit values fell 24.0% to $4.0 billion, leaving them 18.6% below last year’s level. Unlike residential building permits, where housing can be shrugged off as affordability fallout, a broad non-residential pullback suggests softer business investment beyond the condo assembly line.
The drop hit all three major components. Institutional permits led the decline, plunging 51.5% from January to $929.1 million, after a surge tied in part to major transit-related approvals. Commercial permits fell 7.2% to $2.0 billion, their fourth consecutive monthly decline. Industrial permits slipped 9.6% to $985.1 million.
The plunge in non-residential values highlights a broader pullback in builder intentions this February. This is an ominous sign for a real estate market where state-backed incentives are driving builder intentions.
Despite billions in stimulus and aggressive cuts to “red tape,” building intentions are moving in reverse. Nearly every major segment weakened in February, with the lone bright spot being multi-family permits. That slim area of growth is largely concentrated in Ontario, where billions in taxpayer dollars are being used to stimulate development. More money is being sunk into building, but the output keeps shrinking.
New condos not selling, fewer homes planned, fewer houses on the market… folks we’re nearing the end of this humongous real estate bubble. Next step: all those electricians/plumbers/roofers/etc will be out of a job soon, which will drive our economy further into the ground. All of this is the direct result of 20 years of near-zero interest rates which inflated home prices to absurd levels. This is the consequence. It’s going to get much worst before it gets any better.
Supply deniers will claim lower input costs will result in higher home prices.
This is the “Black Swan” event I’ve been warning you about for years. While the mainstream media was busy selling you a “soft landing” and “imminent rate cuts,” the foundation was rotting. Now, with the war in Iran, the trap has finally snapped shut.
If you own a home, stop looking at the “estimated value” on your banking app. We are no longer in a “correction”—we are entering a generational wealth destruction event.
1. The “Negative Equity” Nightmare: Owing More Than the Dirt is Worth
This is the scariest part of the equation. In a “slow melt,” you lose paper gains. In a war-driven crash, you lose your shirt.
The Reality: Tens of thousands of homeowners who bought between 2021 and 2023 are now officially underwater. They owe the bank more than the house could sell for today.
The Example: Look at a typical detached home in a GTA suburb like Brampton. If you bought at the peak for $1.3 million with a 10% down payment, your mortgage was roughly $1.17 million. With the current 8.7% to 10% drop in Ontario prices, that home is now worth roughly $1.15 million. After Realtor fees and closing costs, you are -$70,000 in the hole just to walk away. You don’t own a home; you own a debt trap you can’t afford to sell.
2. The Interest Rate “Death Spiral”
The market was banking on big rate cuts to save them. The Iran war just killed that hope.
The Inflation Bomb: With Brent crude oil screaming toward $120 a barrel, inflation is being pumped back into the system. The Bank of Canada cannot cut rates when gas and shipping costs are skyrocketing.
The Rate Spike: Since the conflict began, 5-year bond yields have surged. Fixed mortgage rates have already jumped 0.25% to 0.50% in a matter of weeks. If you are one of the thousands facing a mortgage renewal in 2026, you are walking into a buzzsaw of payments that could be $1,500–$2,000 higher per month.
3. The Ontario “Inventory Tsunami”
While buyers have frozen in fear, sellers are starting to panic.
The Data: In Ontario, active listings have surged to decade highs. CMHC confirms that Ontario is the only province expected to see sustained price declines throughout 2026.
The Freeze: TD Economics has slashed sales forecasts because no one signs a 30-year debt contract when they think World War III is around the corner. When demand evaporates and supply piles up, the “slow melt” turns into a vertical drop.
4. The “Ghost Town” Construction Crisis
The war has caused a 23% spike in project abandonments this year. Between the skyrocketing cost of fuel, steel, and insurance, builders are walking away from half-finished towers. We are looking at a stagnant market where the only thing higher than your mortgage payment is the cost of living.
The Bottom Line:
I’ve been calling this for a long time, and I took heat for it. But the Iran war is the final pin in the bubble. We are moving from a housing crisis into a total equity wipeout. The exit doors are currently being welded shut by global instability and record debt. If you think you’re safe, you aren’t paying attention.
Have a great day
Edward HC Graydon
This is the “Black Swan” event I’ve been warning you about for years. While the mainstream media was busy selling you a “soft landing” and “imminent rate cuts,” the foundation was rotting. Now, with the war in Iran, the trap has finally snapped shut.
If you own a home, stop looking at the “estimated value” on your banking app. We are no longer in a “correction”—we are entering a generational wealth destruction event.
1. The “Negative Equity” Nightmare: Owing More Than the Dirt is Worth
This is the scariest part of the equation. In a “slow melt,” you lose paper gains. In a war-driven crash, you lose your shirt.
The Reality: Tens of thousands of homeowners who bought between 2021 and 2023 are now officially underwater. They owe the bank more than the house could sell for today.
The Example: Look at a typical detached home in a GTA suburb like Brampton. If you bought at the peak for $1.3 million with a 10% down payment, your mortgage was roughly $1.17 million. With the current 8.7% to 10% drop in Ontario prices, that home is now worth roughly $1.15 million. After Realtor fees and closing costs, you are -$70,000 in the hole just to walk away. You don’t own a home; you own a debt trap you can’t afford to sell.
2. The Interest Rate “Death Spiral”
The market was banking on big rate cuts to save them. The Iran war just killed that hope.
The Inflation Bomb: With Brent crude oil screaming toward $120 a barrel, inflation is being pumped back into the system. The Bank of Canada cannot cut rates when gas and shipping costs are skyrocketing.
The Rate Spike: Since the conflict began, 5-year bond yields have surged. Fixed mortgage rates have already jumped 0.25% to 0.50% in a matter of weeks. If you are one of the thousands facing a mortgage renewal in 2026, you are walking into a buzzsaw of payments that could be $1,500–$2,000 higher per month.
3. The Ontario “Inventory Tsunami”
While buyers have frozen in fear, sellers are starting to panic.
The Data: In Ontario, active listings have surged to decade highs. CMHC confirms that Ontario is the only province expected to see sustained price declines throughout 2026.
The Freeze: TD Economics has slashed sales forecasts because no one signs a 30-year debt contract when they think World War III is around the corner. When demand evaporates and supply piles up, the “slow melt” turns into a vertical drop.
4. The “Ghost Town” Construction Crisis
The war has caused a 23% spike in project abandonments this year. Between the skyrocketing cost of fuel, steel, and insurance, builders are walking away from half-finished towers. We are looking at a stagnant market where the only thing higher than your mortgage payment is the cost of living.
The Bottom Line:
I’ve been calling this for a long time, and I took heat for it. But the Iran war is the final pin in the bubble. We are moving from a housing crisis into a total equity wipeout. The exit doors are currently being welded shut by global instability and record debt. If you think you’re safe, you aren’t paying attention.
The issue of what the BoC can do about any of this is moot. If they raise rates at all, it will likely cause a major price collapse in housing, a bank failure crisis, and a nasty recession. So they are kind of stuck here.
Add to that, the Liberals clear inability not to paint the BoC in a corner, or our ‘safe’ banks from putting profits ahead of everything, including the law. Housing in Canada has become an albatross, it is killing our economy, stifling investment in everything other than housing, and killing our middle class.
The solution is easy, try to shoot for a soft landing (if its possible now) of a 30-50% controlled decline in prices. This would take everyone first admitting their role in the mess, and working together to fix it.
So far dishonesty and greed seem the path chosen by our leaders, which if left unchecked will lead us to a disaster.
PS. WW3 will be caused by the west. If Russia or China wished to begin WW3, the behaviour of the Anglo American and NATO would have caused it 25ys ago. The danger of it happening is that Americans have become so smug in their false belief that their enemies cant end their civilization, that thye truly believe that a nuclear war cant affect them.
The problem is this is primarily from movies and propaganda, not reality. The ‘war’ with Iran has shown that even a middle power like Iran can inflict serious damage on the USA and Israel. The estimates of damage done to US bases and equipment by Iran in the last month is over $100B, not to mention that the USA and Israel have used up almost their entire supply of various anti ballistic missile systems, and still only have a 20% interception rate?
If Russia and China were to launch a major nuclear assault on the USA with ICBM, carrying up to 16 warheads per missile and 1MT of payload each, it is therefore certain that at least 50% of the almost 500 ICBMs and missiles would hit targets in the west. To put that in perspective, a single of those 16 warheads per missiles would devastate all of Manhattan, Brooklyn, Queens, Bronx and into NJ. So if we are talking about 250×16 = 4000 wh that can kill 5+M per hit, its utter devastation of the USA, Europe and other allies. And thats if only 50% hit? Israel, Ukraine with the worlds most advanced western anti missile systems cant stop these, doi you think the USA or Europe can?
So someone needs to get it through our heads that we are actually sitting ducks here, and would get devastated, tom cruise included.