Canada’s housing construction sector saw a significant surge in July, reaching its highest level since September 2022. The Canada Mortgage and Housing Corporation (CMHC) reported a 4% increase in the total monthly seasonally adjusted annual rate (SAAR) of housing starts, rising to 294,085 units in July, up from 283,523 in June.
This growth is largely attributed to a strong focus on multi-unit residential construction, supported by a robust rental market. The first seven months of 2025 have already outpaced the same period in 2024, with notable increases in multi-unit starts across the Prairie Provinces and Québec.
CMHC’s Deputy Chief Economist, Tania Bourassa-Ochoa, explained that today’s elevated results are the outcome of investment decisions made months or even years ago, reflecting how previous market conditions continue to shape current construction activity.
The Rental Market’s Role
Economists point to the rental market as the primary driver of this construction boom. Powerful population growth in recent years, combined with targeted government financing programs, has sustained demand.
One key initiative is the federal Apartment Construction Loan Program, which provides low-cost loans to builders and developers. This program has encouraged new rental supply and is aimed at improving affordability for Canadians.
Regional Variations in Housing Starts
While national housing starts are rising, the picture is not uniform across Canada’s largest cities:
- Montreal: Housing starts soared 212% year-over-year, led by multi-unit developments.
- Vancouver: Starts rose 24% year-over-year, again driven by rental-focused construction.
- Toronto: In contrast, Toronto saw a 69% year-over-year decline, with both multi-unit and single-detached starts falling. High development costs continue to restrict new rental supply.
- Alberta: Edmonton reported a 36% annual increase, while Calgary showed a 22% year-to-date gain despite a July slowdown. Alberta’s absence of rent control, paired with strong population inflows, is fueling investment.
What Lies Ahead
Despite the current strength, economists are signaling caution.
- Economic uncertainty and slower immigration are already weighing on new project proposals and pre-sales.
- Rents are easing in several major markets, reducing developer confidence.
- TD economist Rishi Sondhi projects housing starts will remain steady in the short term but anticipates a slowdown by 2026 as population growth moderates and asking rents decline further.
- The ownership market also faces challenges, with lower pre-construction sales expected to keep activity subdued.
Key Takeaway
The surge in housing starts underscores how Canada’s housing market is evolving to meet rental demand. While short-term trends remain positive, long-term forecasts suggest a cooling period ahead. For renters, investors, and homebuyers, this dynamic environment presents both opportunities and risks.
What This Means for You
Whether you’re exploring rental investment opportunities, considering a pre-construction purchase, or navigating today’s shifting market in Kelowna and the Okanagan, expert guidance is essential.
👉 Connect with Coldwell Banker Horizon Realty today for insights tailored to your goals. Our team is here to help you make informed real estate decisions in a market that’s constantly changing.
The content of this article is for informational purposes only and should not be considered as financial, legal, or professional advice. Coldwell Banker Horizon Realty makes no representations as to the accuracy, completeness, or suitability of the information provided. Readers are encouraged to consult with qualified professionals regarding their specific real estate, financial, and legal circumstances. The views expressed in this article may not necessarily reflect the views of Coldwell Banker Horizon Realty or its agents. Real estate market conditions and government policies may change, and readers should verify the latest updates with appropriate professionals.