Summary:
The Canada Mortgage and Housing Corporation (CMHC) reports a mixed landscape for housing starts in 2025. While cities like Calgary, Edmonton, Montreal, Ottawa, and Halifax saw robust construction, particularly in rental apartments, Toronto and Vancouver experienced significant slowdowns. Toronto recorded its lowest housing starts in 30 years, driven by a sharp decline in condominium projects, while Vancouver faced a 13.4% drop in condo starts due to weak pre-construction sales. CMHC emphasizes the need for systemic changes to address development charges and approval processes to improve housing supply and affordability.
What This Means for You:
- For Homebuyers: Expect continued affordability challenges in Toronto and Vancouver, but explore emerging markets in Calgary and Edmonton for better opportunities.
- For Investors: Focus on purpose-built rental properties, which are supported by government incentives and showing strong growth in multiple cities.
- For Builders: Advocate for lower development charges and streamlined approval processes to improve project feasibility and reduce delays.
- Future Outlook: The housing market is likely to see gradual recovery by 2027, with modest improvements in larger metropolitan areas.
Original Post:
By Daniel Johnson
The agency says cities like Calgary, Edmonton, Montreal, Ottawa and Halifax built homes at paces that were either at or near records or in line with historical averages in the first half of the year, led by the construction of rental apartments. However, slowdowns in Canada’s two most expensive real estate markets weighed on the overall number of starts. Vancouver saw a decline in housing starts during the first half of the year compared with 2024, while Toronto was on pace for the lowest total annual housing starts in 30 years.
“While the increase in rental construction in the first half of 2025 was encouraging, the ongoing construction slowdown in the home ownership market poses risks to future housing supply, workforce retention, and affordability,” Tania Bourassa-Ochoa, CMHC’s deputy chief economist, said in a press release.
CMHC says homebuilding activity in Toronto fell to its lowest point since 1996 on a per-capita basis, mainly due to a 60 per cent drop in condominium starts. The decline came amid weaker investor demand for condos during the first half of the year, leaving projects less feasible and more prone to cancellations or delays.
The agency said builders want to see construction costs and development charges lowered to “ease condominium prices and improve project viability.” In Vancouver, condo starts fell 13.4% during the first half of the year, with weak pre-construction sales resulting in paused and cancelled projects. CMHC says development charges were a significant barrier to homebuilding in the city, but it noted new provincial regulations are set to take effect next year, allowing for the deferral of about two-thirds of development charges until occupancy.
Outside of Canada’s two largest real estate markets, CMHC highlighted a surge in purpose-built rentals, fuelled by government support and incentives. The agency said purpose-built rental units account for a growing share of total apartment construction. New home construction in Calgary reached a record because builders feel good about the region’s growth trajectory, according to CMHC. Rental construction continued to surge in the city, driven by strong population growth, favourable zoning and financing programs. The agency said updated municipal zoning that supports construction of laneway housing, secondary suites and more, facilitated greater density in the city.
In Edmonton, CMHC said housing starts benefited from higher levels of construction for both apartments and single-detached units. Despite some of the positives in certain regions, Bourassa-Ochoa noted the report overall still reflects that confidence in the residential construction industry is being impacted by development charges and a lengthy approval process. “Systemic changes to Canada’s housing system are necessary to create an environment with more cost and time certainty to increase supply,” she said.
Amid economic uncertainty, trade tensions and lowered immigration targets, the report said it expects housing starts across larger metropolitan areas to face a gradual recovery, with only modest improvements by 2027.
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Canada Mortgage and Housing Corporation CMHC cmhc housing starts Dashboard home construction homebuilding housing market Tania Bourassa-Ochoa The Canadian Press
Last modified: September 9, 2025
Extra Information:
CMHC Official Website – Explore detailed reports and resources on Canadian housing trends.
Statistics Canada: Construction – Access data on construction activity and housing starts across Canada.
RBC Housing Market Report – Insights into current housing market conditions and forecasts.
People Also Ask About:
- Why are housing starts declining in Toronto and Vancouver? Weaker investor demand, high development charges, and lengthy approval processes are primary contributors.
- What is driving the surge in purpose-built rentals? Government incentives, strong population growth, and favourable zoning policies are key factors.
- How can builders improve project viability? Advocating for lower development charges and streamlined approval processes can help.
- What is the outlook for Canada’s housing market by 2027? A gradual recovery is expected, with modest improvements in housing starts.
- How do development charges impact homebuilding? High development charges increase costs, making projects less feasible and delaying launches.
Expert Opinion:
Tania Bourassa-Ochoa highlights the urgency of systemic changes to Canada’s housing system. Addressing development charges and approval timelines is critical to ensuring a stable and affordable housing supply, which is essential for workforce retention and economic growth.
Key Terms:
- Canadian housing market trends 2025
- CMHC housing starts report
- Purpose-built rental construction
- Development charges impact homebuilding
- Toronto housing starts decline
- Calgary record housing starts
- Affordable housing solutions Canada
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