2025 Sees Increase in Housing Starts, but Condo Pipeline Deteriorates: CMHC
Overview of Canada’s Housing Supply Dynamics in 2025
In 2025, Canada witnessed a significant increase in housing supply, primarily driven by a surge in rental development and a notable rise in missing middle housing. According to the Canada Mortgage and Housing Corporation’s (CMHC) Spring 2026 Housing Supply Report, national housing starts climbed by 6% year-over-year, reaching 259,000 units. While this uptick demonstrates resilience in overall construction activity, the report underscores emerging vulnerabilities, particularly in major ownership markets such as Toronto and Vancouver.
The report attributes the bulk of the new housing supply to rental development, which reached nearly double the 10-year average. Major markets like Calgary, Edmonton, and Ottawa saw record-high rental starts, reflecting an ongoing emphasis on increasing supply to combat affordability issues. Toronto, while experiencing a notable rental construction boost, still recorded the lowest per-capita housing starts among Canada’s largest metropolitan areas.
However, the report raises alarms over the future pipeline of ownership-oriented housing. Condominium presales have sharply declined, and unsold inventories are escalating across several markets, signaling potential challenges ahead. In Vancouver and Toronto, unsold condominium units and row houses are particularly concerning, suggesting that financing conditions for new projects could tighten as completed units remain unsold.
Simultaneously, the construction timelines have improved due to increased efficiency and smaller project sizes. Markets like Calgary and Edmonton reported the fastest apartment construction timelines, augmenting the country’s overall delivery capacity. Completions also surged, particularly in Vancouver where a new record was established for apartment projects.
Despite these achievements, the cooling condominium market poses significant risks for future development. With elevated construction costs and a shift in investor sentiment, many developers are finding it increasingly challenging to secure financing, leading to project delays or cancellations. This slowdown could exacerbate supply shortages in the coming years if demand rebounds.
In Toronto specifically, current market conditions present a short-term surplus of housing; however, the longer-term outlook is troubling. A decline in housing starts—now the lowest since 2009—suggests a precarious future for inventory levels. The movement towards smaller projects in response to economic uncertainty also complicates the landscape, as there is heightened demand for family-sized homes compared to smaller condominiums.
Overall, while the immediate supply issues may ease as newly completed housing enters the market, the broader trend indicates a potential tightening of future housing availability. As the housing landscape evolves, it remains crucial for stakeholders to monitor these developments closely, balancing immediate supply with long-term sustainability.
📋 Article Summary
- Canada saw a 6% increase in housing starts in 2025, reaching 259,000 units, driven by record rental construction and the growth of missing middle housing, although Toronto struggled with low starts.
- Rental units under construction hit nearly double the 10-year average, improving vacancy rates and slowing rent growth in key markets like Calgary and Edmonton.
- Despite current supply growth, rising unsold inventories and a sharp decline in condominium presales raise concerns about future development and potential supply shortages.
- Long-term supply risks are evident in both Vancouver and Toronto, where project cancellations and decreasing housing starts suggest future constraints despite relaxed market conditions in the short term.
🏗️ Impact for Construction Professionals
The recent Spring 2026 Housing Supply Report underscores significant shifts in the Canadian housing market that construction professionals should leverage to adapt and thrive.
Practical Business Implications: Increased housing starts, particularly in rental and missing middle construction, present opportunities for contractors to focus on these segments. With rising rental projects driving demand, aligning services to cater to this trend can enhance project acquisition.
Potential Opportunities: Those in urban markets—especially Calgary and Edmonton—should capitalize on the growing appetite for missing middle housing, while Toronto and Vancouver may face challenges from unsold inventory and declining condo starts. This suggests focusing on diverse housing solutions and flexible project financing options.
Actionable Insights: Consider diversifying project portfolios to include multipurpose developments. Strengthen relationships with stakeholders like municipalities to streamline approvals, especially for smaller or adaptive reuse projects, as these trends are on the rise.
Day-to-Day Operations: Monitor market conditions closely, adjusting project priorities based on demand shifts. Strategic planning should encompass stable financing pathways to counteract funding challenges amid rising costs and economic uncertainty. Ultimately, positioning your business to adapt to these trends can translate into sustained success in a dynamic marketplace.
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