Canada Mortgage and Housing Corporation (CMHC) says overall housing starts were flat in the first half of 2025 compared to last year, as slowdowns in Toronto and Vancouver offset strong construction growth in other regions.
CMHC reported that Calgary, Edmonton, Montréal, Ottawa, and Halifax built homes at or near record levels, with most of the growth coming from purpose-built rental construction. But weaker activity in Canada’s two most expensive markets weighed heavily on the national total.
Toronto housing starts are on pace for their lowest annual level in 30 years, with activity falling to its weakest point since 1996 on a per-capita basis. The sharp decline was driven by a 60 per cent drop in condominium starts, amid weaker investor demand and growing cancellations or project delays.
In Vancouver, condo starts dropped 13.4 per cent in the first half of the year, largely due to poor pre-construction sales. Builders in both Toronto and Vancouver cited high construction costs and development charges as major barriers to viability. CMHC noted that new provincial rules in British Columbia, set to take effect next year, will allow developers to defer two-thirds of development charges until occupancy, potentially improving project feasibility.
By contrast, Calgary recorded record housing starts, supported by strong population growth, favourable zoning changes, and financing programs that boosted rental and laneway housing construction. Edmonton also saw growth in both apartments and single-detached homes.
“While the increase in rental construction in the first half of 2025 was encouraging, the ongoing slowdown in the home ownership market poses risks to future housing supply, workforce retention, and affordability,” said Tania Bourassa-Ochoa, CMHC’s deputy chief economist.
She added that systemic reforms are needed to reduce costs and shorten approval timelines: “Systemic changes to Canada’s housing system are necessary to create an environment with more cost and time certainty to increase supply.”
The report also highlighted that purpose-built rentals are becoming an increasingly large share of new apartment construction, driven by federal and provincial incentives.
Looking ahead, CMHC projects housing starts across major Canadian cities will see only a gradual recovery, with modest improvements expected by 2027, amid economic uncertainty, trade tensions, and lower immigration targets.