Canada's housing construction activity showed no significant change in the first half of 2025 compared to the same period in 2024, according to the latest data from the Canada Mortgage and Housing Corporation (CMHC). While the national picture appears stable, notable variations across regions highlight ongoing challenges in the real estate sector. This stability comes amid efforts to boost housing supply, but slowdowns in key markets raise concerns about future availability.
National Trends in Housing Starts
Overall, the number of new housing projects initiated across major Canadian cities held steady, with combined starts in seven key metropolitan areas nearly matching 2024 levels. This flat growth masks a mix of strong performances in some areas and declines in others. A key driver of activity has been the rise in purpose-built rental units, supported by government incentives and financing programs. These rentals now represent a larger portion of apartment construction, helping to offset drops in other segments like condominiums. Ground-oriented homes, including single-detached and row houses, saw a modest increase of about 5 percent. Lower mortgage rates have encouraged some demand in more affordable regions, though high costs continue to limit broader recovery. Apartment starts, which make up 70 percent of new construction, dipped slightly by 2 percent, primarily due to fewer condominium projects starting amid weaker investor interest.
Regional Variations Highlight Uneven Progress
Certain cities maintained or exceeded historical building paces, driven by population growth and supportive policies. For instance, Calgary achieved record levels of new home construction, fueled by strong rental demand and updated zoning rules that promote denser developments like laneway homes and secondary suites. Edmonton also reported robust growth, with increases in both apartments and single-family homes, aided by policies encouraging downtown expansion and overall affordability.
Montreal experienced an uptick in starts, largely from rental apartments, though condominium activity slowed due to high prices deterring buyers. Ottawa saw housing starts nearly double, with rentals leading the way, which could ease supply pressures for tenants as population growth moderates. Halifax continued at high historical levels, mainly through rental projects, despite challenges like lengthy permit approvals.
In contrast, Canada's priciest markets faced setbacks. Vancouver recorded a decrease in new starts compared to 2024, with condominium activity down 13.4 percent due to weak pre-construction sales and project pauses. Upcoming provincial rules set for 2026 will allow deferral of up to 75 percent of development charges until occupancy, potentially aiding stalled projects estimated at around 100,000 units.
Toronto showed the most significant slowdown, on track for its lowest annual housing starts in three decades. On a per-person basis, building activity hit its lowest point since 1996, driven by a 60 percent plunge in condominium starts. Weaker demand from investors has led to more cancellations and delays, making many projects less viable.
Risks to Future Housing Supply
The CMHC warns that persistent slowdowns in homeownership-focused construction could threaten long-term supply, workforce stability, and affordability. Deputy Chief Economist Tania Bourassa-Ochoa noted that high development charges and prolonged approval processes are burdening developers, as reflected in industry confidence surveys. She emphasized the need for systemic reforms to reduce costs and timelines, fostering a more predictable environment for increasing supply. Looking ahead, the agency anticipates only gradual recovery in housing starts across major areas, with modest gains by 2027. Factors like economic uncertainty, trade issues, and adjusted immigration targets may temper progress. In Toronto and Vancouver, ongoing challenges could exacerbate affordability pressures if demand rebounds without matching supply.
For more details, refer to the CMHC Housing Supply Report and related analyses on housing shortages in Canada.
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.
